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For the sake of all the other HN founders here building our own apps and trying to sell/monetize, how much did you get acquired for? I think it’d be super insig

• achenatx 7y ago
  recurring revenue is king. Typical valuations are 7-10X revenue (crazy right?) for a strategic acquisition. For example a friend of mine was doing about 3m in revenue (about break even) and I believe sold for about 15-20M (I forget the exact number). I think it took him about 8 years to get there. Another friend got a similar multiple on 7M in revenue. On the other hand I was talking to a founder last week about acquiring his company. he is doing about 1M in revenue and was asking about 600K. I dont think we can close before the end of the year so passed, but would definitely consider it if he is still available next year.
  • tozeur 7y ago
    Thanks for the info! I understand fairly well how software companies are valued. I, and probably many others, am just interested in a number/ballpark.
    • shrimpx 7y ago
      My guess is a few hundred thousand, like 3 or 4. It sounds like an acquihire with a decent signing bonus more than an acquisition.
  • pc86 7y ago
    Strategic is the key word here, though, and this is only for tech. 80%+ of acquisitions will not be strategic in this context so even in tech it's very unlikely to get 7x top-line revenue. In many sectors, especially with brick-and-mortar businesses, 3-5x gross profit is more likely. In low- or mid-margin businesses this can easily be less than 1x gross profit for the last 12 months, let alone the tricks places like FE Int'l play like just multiplying the last quarter's revenue by 4 and calling that yearly revenue.