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allcreative
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Zuma, post: 6636 wrote:
The fellow I’ve worked with for five years on an internet venture has offered to buy me out, and I’m wondering how I would go about evaluating “half” of such a thing?

It’s internet software with a sizable and growing user base, with expected (or at least very good potential for) growths in the near future. There are no peripheral issues involved — no hardware or physical properties that need be considered.

I’m sure this sort of thing goes on all the time so I’m hoping there’s some sort of A + B * C formula I can apply; something that might multiply my current monthly income by a certain number of months, by something that takes time spent and future potential into account. Or am I being a bit hopeful? :)

If there’s no standard approach, who should I talk to for that sort of advice? Would an accountant know what to do in such circumstances?

Thanks,
Row

A Business Broker would probably have the best idea, but that would be more if you were going to sell out entirely (the other fellow included).

I certainly wouldn’t be paying you for your time spent to date and the potential future income. I would only be paying for the average existing income multiplied by a certain number of months, be it 3, 6, 9, 12, 24,…..I don’t know of another fair way for ‘small time’ products (no offence).

Obviously big companies pay big dollars for potential income (think YouTube, Facebook, etc), so that’s a valid way for sure, I just wouldn’t be paying for it!

Joel