4 ms·

How do you know what your side project is worth?

• coldtea 10y ago
  By attempting to sell it.
• appleiigs 10y ago
  Typical valuation methods are: multiples, replacement value, comparable transactions. 1) Multiples: a comment from Flippa says websites go for 2-4x annual net profit, which is similar to a Mom&Pop operation. So if your side project made $5,000 per year, then value would be $15,000 at 3x multiple. I like to think about multiples in years. It'll take me 3 years to make my initial investment back - then I think is that good or bad? Apple's stock price to earnings is at 12.6 years, Amazon is at 99 years. 2) Replacement Value: if you estimate your time to be $100 per hour and you could replicate the app/website + business in 1 month, then $100 x 8 hrs/day x 20 business days = $16,000. 3) Comparable Transactions: if you see projects similar to yours going for $25,000, then that's what the market is saying.