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Has anyone sold a company or software to another company?

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LuckyTaxi

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I'm not referring to a monthly fee for a SaaS, but I'm looking for those who sold code or a "fork" of their code to another company. If anyone remembers, my project has garned interest from a company that wants to buy my software with some modification. They're also looking to share a revenue model going forward.

At first I thought they wanted to buy a fork of the code out-right but it seems they want to have a model that benefits the both of us. Question is, how do I come up w/ a number for the software?
 
I sold one of my companies earlier this year. We valued it by looking at the potential profit stream over a 25 year period. The company value was set at the NPV of this profit stream, less an agreed to % for risk and uncertainty. 25 years is far longer than is usually agreed to but there were valid reasons for doing so in my case. The contract documents were over 150 pages in length, and the legal fees were close to $30k.

I am a partner in another business that we are considering selling, and for this one it is more likely that it would be valued over a 5-6 year period.
 
Thanks, if a company is offering revenue sharing would that mean that I would need to value it lesser since there's future revenue to be made? They wouldn't be buying my company per say, they want to buy the software I made. I'm looking at it as if they contracted me to develop an application for them.
 
I would think that the valuation would be the same, but the final calculation of the buying price for the software would be reduced by the share of revenue they are offering you.

EG: if the NPV of the profit stream is $100,000 and the agreed risk, uncertainty and margin is 25% then the value of the software would be $75,000. If your share of the ongoing revenue is 10%, then the cash purchase price would be $67,500. This is very simplistic, and the calculation of the $100,000 and the risk/margin can be very complex.

I think you are undervaluing your software if you value it at the cost to write the code. There was the idea, development of the idea and even potential patent value.
 
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