Episode Details

In this episode, you’ll hear about:

• The pros and cons of selling an app on your own versus going through a broker
• What to watch out for during negotiations
• What to expect after selling your app

Follow Us:

David Barnard: https://twitter.com/drbarnard

Jacob Eiting: https://twitter.com/jeiting

Eric Owens: https://www.linkedin.com/in/ericowens/

Here’s the Outline of Our Interview with Eric:

(1:00) Eric and David have worked together before!

(1:25) How Eric became an app broker.

(5:09) The top reasons app developers decide to sell their businesses; capital gains taxes; David’s experience selling his first app.

(8:03) Why people buy app businesses.

(10:11) Do app buyers typically purchase successful apps or fixer-uppers?

(13:35) The benefits of selling a successful app “prematurely;” David’s Mirror app.

(15:25) The challenges of selling iOS apps: iCloud, Passbook, Sign In with Apple, Catalyst; Gas Cubby.

(19:13) How app business valuations are calculated; the App Store Small Business program.

(23:34) Adding subscriptions to an app increases its value to buyers.

(26:51) What kind of documentation you should have in place before selling your app.

(28:34) How buyers approach purchasing an app from a solo developer.

(30:27) Finding app buyers.

(33:33) App business sales increased during the COVID-19 pandemic.

(34:00) The pros and cons of selling your app on your own; Flippa.

(39:17) Going through a broker helps you stay emotionally detached during the negotiation process.

(40:35) Fiduciary duties; representing app buyers versus sellers.

(42:38) What to watch out for during negotiations; low-ball offers; due diligence.

(48:17) The app sale closing process; escrow.com; closing costs.

(50:21) Brokerage fees; working with Eric.

(51:00) What comes after an app sale? Non-compete agreements; handoffs.

(57:00) Connect with Eric on LinkedIn or get in touch at appbusinessbrokers.com.

Quotes:

“Any business with any kind of subscription revenue is always going to sell for higher, no matter what it is. Buyers love that... The one move you can make in any business that will increase your valuation is to add some kind of subscription revenue.” - Eric

“As I get later in my life, [I’ve realized] brokers are amazing. Think about it: as an app developer, you spend 99% of your time being an app developer, right? And then you have this 1% critical action, which is the sale… It’s really useful to have somebody on your side who’s done this before and can tell you what you’re doing that’s wrong and what you’re doing that’s right.” - Jacob

“If you’re an inexperienced seller of something, get somebody to help you out.” - Jacob

“I forget what I paid Eric; it was probably $20,000 or $30,000. But to me, I saw it as worth every penny because he helped bring the market that got the highest and best value of the app… Having access to that pool of