Sell a month-old app at ~5x yearly revenue but keep 30% of it

Caleb Dean… interesting. And at first, it was just like me and Dev, cuz he he wasn't the buyer. He was like he has like a PE company um and he had like a bunch of clients that he was like serving, and like one of them, Runify made the most sense for. So then we kind of like talked through like where my head's at, what he's thinking, and he yeah, managed to convince me to get on another call with the buyer. And that's pretty much where everything went down.

Caleb DeanOne, figure out the MRR. Like we didn't have enough revenue in the We didn't have a full month of revenue, so we yeah, I think it was 27 days, and then we kind of like looked at the current trial um success rate, and then like calculated how many trials we had to get us an estimate, and that was around like 3k MRR. Um and then, yeah, the 5x, 4.5, 5x, I can't remember exactly, ARR to get the valuation. And so like that was like step one is like, okay, we have like a rough valuation.

Caleb DeanAnd then there were like other terms to the deal. So I actually retained 30% of Runify in in in like equity, which was like super interesting. And there was like 6 months of like an additional like earn-out period of like cash on top, and then there was a cash bonus, which wasn't tied to the equity. And another reason why like I thought it was a really interesting offer was, one, I was retaining equity, meaning I can continue working on the product, but the buyer was bringing in like people for distribution,

Caleb Deanand he was also like more than happy to bring like capital to the table to like reinvest. Like whether that's influencers, UGC, paid, like pretty much like the ability to scale the app even faster than like we would from just like using the revenue which we've made.

Caleb Dean… some notes for this cuz like this was like a big thing for me. Like it wasn't an easy decision, because I was so confident about the product, um particularly Runify. It was like I had my eyes set on 100k a month, so it's like, why would you sell for like around six figures if you're so set on 100k a month? And I think one of the biggest things for me was the fact that it's like I get to keep like a substantial amount of equity in the company.

Caleb DeanIt's like the saying like, you're you're better off having 10% of a watermelon rather than like 80% of a grape. It was like that main factor in combination with, one, like you said, it was a really good offer for being 28 days out of launch, and then I also like calculated, okay, because there was like obviously this compensation like throughout the following months. I'm like, okay, if I didn't get any of that, like just this straight-up cash in account like upfront compensation, and yeah, that that made sense to me.

Caleb DeanAnd plus, having that capital to then like apply to a a different app, say, and then actually another factor, which I thought would be really valuable, which I've seen slightly play out, is being able to leverage this sale for like my personal brand and attracting talent, like, for one, I'm on this podcast, I've worked with new co-founders through like Twitter, I've had a bunch of posts blow up. Like you saw, I had that the post where I actually …