Tactics for buying and selling apps

Couldn't outrank an app for a keyword wanted for a client, downloaded it and saw it was undermonetized: #1 for two keywords with ~28 and ~34 search volume, 100-150 downloads/day, one-time $2-3 price, no onboarding paywall. Benchmarked price on a similar client app doing ~$1M ARR at $60/year. Bought it (2022), added onboarding and a paywall (mid-May), went fully hard paywall with a trial at $60/year in June. No new features and no extra downloads.

Rather than paying cash, take a loan for the purchase price. Illustration: an app making $10K/month profit bought for $350K on a 10-year loan with ~$5K/month payments leaves ~$5K/month profit; price is earned back in ~3 years with 7 more years of loan term. Only buy apps with organic distribution built in, so profit doesn't depend on continued ad spend. Used for Indie App Santa (2024) even though they had the cash.

With under a month of revenue, estimated MRR from 26 days of revenue plus 20-30 pending 7-day trials at the current trial conversion rate (~$3K MRR), then priced at ~4.5-5x ARR. Terms: 30% equity retained, 6-month cash earn-out, separate cash bonus; the buyer's studio brings developers, a distribution team and capital. Diligence took a couple of days (App Store Connect access to check users weren't bought), then six contracts negotiated, funds via escrow, then asset transfer. He weighed it as de-risking, capital for the next app, and personal-brand leverage.

Tweeted about Praycreen (his audience knew he'd sold apps before; the app was easy to explain). Several buyers DMed. Sold to a buyer who had talked to him about BibleBuddy ~1.5-2 years earlier. His rule: since 90%+ of deals fall through, take even the third-highest price if that buyer can close in 4-5 days. Offer a 1-2 month transition/advising period to sweeten the deal. Show 3+ months of consistent revenue.

Look for apps that look like short-term viral hits but tap a broad, lasting interest (e.g. celebrity lookalike curiosity). Buy them after the viral peak while revenue is falling and sellers don't know how to grow them. Judge on data: can we scale it profitably long-term and 20x revenue, making multiples of the acquisition price. Then run the studio's UA machine plus dozens of A/B tests a month per app to lift ARPU (the LTV/CAC loop).

Decided to explore a sale at a peak, right after making the Inc. 500 list, with a personal goal of exiting before 38. Talked to a couple of brokers, who made introductions, and listed on the Acquire.com marketplace. Bought out investors first, which drained both business and personal bank accounts; covered bills with $50K on an Amex card and $200K more in personal debt during a 6-7 month process.

In 2020, with iOS 14 hurting ad tracking, compared spending money on ads vs buying apps. Bought Done (habit tracker, bundled with 5-6 other apps) at a 'pretty good price' because it was under-monetized, then improved paywalls and in-app subscriptions. Keeping the asset, user base and tech (resellable later) made acquisitions more reliable than ad spend. Repeated for 30-35 apps 2020-2025 across journaling, habits, fasting, money tracking, calendar and mindfulness (Mindfulness App to round out categories). Buying apps was usually the better use of capital, except in January when ad spend won.

When a strategic buyer asked for downloads and users, Eric instead showed conversion metrics against RevenueCat's State of Subscription Apps benchmarks (25% trial start, 75% trial conversion). He asked Very Good Ventures what it would cost to build the app, asked others for advice, and set a high ask. Buyer's final offer was $75K with a hint they would build it themselves. After advice from Seth Miller (Rapchat) via the Sub Club community to call the bluff, he walked away; Curtis Herbert (Slopes) later advised not to anchor on the number since deals get re-traded in diligence.

Solo technical founder in Brazil built from his bedroom, learned UA, backend and frontend himself, raised no VC, and sold to BlueThrone about 18 months after launch.

Choose the buyer type that fits: aggregators/holdcos (traffic, recurring revenue, clean books, room to 10x), strategics (highest multiples via synergies), or private equity (predictable cash flow, strong EBITDA; founder stays 3-5 years). Read each target's last five deals to see why they bought, then build the metric narrative they want (e.g. for Strava: beginners onboarded and graduating to 5K). Start relationships 6-12 months before the sale. Ask buyers what moved the needle on past deals (ads, price tests, features) to know what they'd do with your app.

Creator contracts grant perpetual rights to run the videos as ads (no 1-year licenses to renew) and freedom to edit and mix-and-match footage. Avoids creators demanding e.g. $100K when an ad takes off. At the sale, all creatives were handed to the buyer together with the signed contracts.

Used broker Charlie from Appflip. Negotiated without rush from strength (proven ad process, warmed-up Meta account, Meta rep, 300 rights-cleared creatives, strong conversion/profit as a business app). Hired a lawyer qualified in both Europe and the US; ~100-page contract; funds via an escrow in Singapore; broker connected them with another founder who had sold to the same buyer, who vouched on a call. Founder spent ~1.5-3 months mostly on legal.