RayAndré
Win From Within
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Hey all,
So my partner and I disagree on the future path of our business and I asked if he would like to buy me out. He's willing, so next step is to get a valuation of the business and agree on a fair price.
So...what is the best way to evaluate our business? Specifically:
Naturally, he's going to want to pay me as little as possible and I'm going to want to get paid as much as possible.
So I guess its a matter of agreeing on what "fair" means.
Anyway...here are some details of the business and then I'll get into the questions I'm looking for:
And some questions I'll be researching to get started:
I'll update as I go and find some answers.
So my partner and I disagree on the future path of our business and I asked if he would like to buy me out. He's willing, so next step is to get a valuation of the business and agree on a fair price.
So...what is the best way to evaluate our business? Specifically:
- What multiple is fair? Why?
- What do we use the multiple on? (Revenue, profit, etc). Why?
- Any other factors that would increase or decrease the value, multiple, etc of the business.
Naturally, he's going to want to pay me as little as possible and I'm going to want to get paid as much as possible.
So I guess its a matter of agreeing on what "fair" means.
Anyway...here are some details of the business and then I'll get into the questions I'm looking for:
- I'd call our business a "micro SaaS"
- Our products are "micro applications" we sell for a monthly subscription on a niche 3rd-party platform.
- We've been in business 7 months
- Our profit margin is very good.
- Under the hood, we're a separate entity, but from a public/brand perspective, we're a branch of _his_ personal brand
And some questions I'll be researching to get started:
- What is a typical multiple for our type of business? How would I find it?
- How does technically being a "start up" effect our valuation? Sounds like most of the big name brokers don't deal with startups...therefore making it more difficult to get advice on a valuation.
- What needs to be written in a buy-out contract?
- What payment terms are fair? All up front? X% down then a monthly payment plan? How does this affect price?
- Is there an escrow service we can use for when we get there?
I'll update as I go and find some answers.
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