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This seems like a great deal for everyone involved! I think the real takeaway here is that many entrepreneurs are not interested in running successful business

This seems like a great deal for everyone involved! I think the real takeaway here is that many entrepreneurs are not interested in running successful business. They'd rather be starting new things! So if you are good at running businesses there's a decent chance you can take over their business in return for letting them keep a lot of the profit. Everyone wins - the creator gets an income stream to support their future work and you get a business that's already working.

jpindar 6y ago
And people have different definitions of successful. Some might think a business is not worth bothering with if it's not going to make them rich, I'd consider it successful if it could pay my rent.
- that_guy_iain 6y ago
  Yea, I was reading lean startup and it goes on about how just because the revenue and profits are going up doesn't mean you're doing well. It considered success as growth by other metrics.
- taneq 6y ago
  Exactly. My company’s first product is niche enough that it will never scale to the stratosphere... but my goals for it were explicitly: 1) To provide a steady enough stream of income that I don’t have to go back to a “real job”. 2) To do so while allowing me to spend some time developing my next product (with better scaling characteristics.) It’s doing both of these so I consider it a total win, despite me still not owning a private island.
vdfs 6y ago
What i don't understand is, if the seller is not in need for the whole selling price, and the MRR is covering his installment, why sell it? He will make $500K in 20 months and keep 100% ownership
- superhuzza 6y ago
  I imagine the founder enjoyed building it, but was tired of running it.
- Kye 6y ago
  Some people are able to feel like they have enough money and let others make it while they go after new things.
- haser_au 6y ago
  Seller can see the potential if others (with different/more experience) are brought on board to implement new ideas and generate more revenue. Option A: Retain 100%, and profit $500K over 2 years Option B: Retain 20%, take $100K of profits, but create an opportunity for uplifting the revenue potential. Seller took Option B, and now owns 20% of a business generating $1M+ each year (so his share is now $200k revenue), with more time on his hands.
  - machomaster 6y ago
    In Option B the seller was paid $400K, not $100K.
- aeturnum 6y ago
  I think it's a pretty good deal to get back 100% of the time you spend maintaining something while keeping 20% of the revenue.

jpindar 6y ago

And people have different definitions of successful. Some might think a business is not worth bothering with if it's not going to make them rich, I'd consider it successful if it could pay my rent.

that_guy_iain 6y ago
Yea, I was reading lean startup and it goes on about how just because the revenue and profits are going up doesn't mean you're doing well. It considered success as growth by other metrics.
taneq 6y ago
Exactly. My company’s first product is niche enough that it will never scale to the stratosphere... but my goals for it were explicitly: 1) To provide a steady enough stream of income that I don’t have to go back to a “real job”. 2) To do so while allowing me to spend some time developing my next product (with better scaling characteristics.) It’s doing both of these so I consider it a total win, despite me still not owning a private island.

vdfs 6y ago

What i don't understand is, if the seller is not in need for the whole selling price, and the MRR is covering his installment, why sell it? He will make $500K in 20 months and keep 100% ownership

superhuzza 6y ago
I imagine the founder enjoyed building it, but was tired of running it.
Kye 6y ago
Some people are able to feel like they have enough money and let others make it while they go after new things.
haser_au 6y ago
Seller can see the potential if others (with different/more experience) are brought on board to implement new ideas and generate more revenue. Option A: Retain 100%, and profit $500K over 2 years Option B: Retain 20%, take $100K of profits, but create an opportunity for uplifting the revenue potential. Seller took Option B, and now owns 20% of a business generating $1M+ each year (so his share is now $200k revenue), with more time on his hands.
- machomaster 6y ago
  In Option B the seller was paid $400K, not $100K.
aeturnum 6y ago
I think it's a pretty good deal to get back 100% of the time you spend maintaining something while keeping 20% of the revenue.