Sell Your Web App: Lessons I Learned From Selling DropSend

Great ... I'll file this under my "stuff to remember if my wildest dreams come true and someone buys my startup" folder.

I a lot of interesting info that I haven't seen linked yet:<p>From 11/24/06, via Google cache: <a href="http://is.gd/5cvU" rel="nofollow">http://is.gd/5cvU</a><p>"How much profit does DropSend bring in each month?<p><pre><code> * Revenue: $9,041.81 per month (and growing by 8.6% per month) * Costs: $2,100 per month (Servers at 365main.com + maintenance) * Profit: $6,941.81 per month"</code></pre>

I guess the "Cash not stock" advice is more true right now, in retrospect, than in general?<p>I mean, since stock is riskier than cash, you can demand more of it? Of course it depends what stock is on offer - but as the market looks now, and if I'm able to sit on it for five years, I'd absolutely prefer 110 value-units of GOOG over 100 value-units of cash.

"Expect staged payments The buyer will usually pay 50% on completion (signing) of the contracts and 50% on successful transfer of the domain name(s). Make sure to start the domain transfer process the moment the contract is signed."<p>This is not quite the normal way that it works. In the last 12 months I have been involved in two major UK web acquisitions and, actually, the way it works is that a couple of % of the transaction value is kept as a retention for a full financial year after completion. This is in case of something going wrong (whatever that might be), the buyers will have a pool of cash big enough to sort out whatever is likely to happen. If everything checks out ok, then that cash will be released.

Good article.<p>Interesting about the merchant account/billing stuff. I would think an acquiring company would be willing to work things out over time–even after the sale. After all, all the money is still going to them.

How do you find buyers though?

If you're selling someone a company, surely you would just sell them the merchant account and company bank account as well, no? Did they sell the application but not the company?

Good article.<p>Does anyone know about how much DropSend sold for?