What are some key metrics to determine the value of a FB app, and is it a good time to sell an app that is successful but growth is stagnating?

"Based on the success we are able to achieve" suggests, to me, you are looking at a price that will be tagged to an earn out provision. In other words, the price of the deal will be contingent on you achieving specific revenue targets in the future. If I'm reading this wrong, please correct me because it's an important piece of information. Early stage startup typically suggests a focus on revenue growth with minimal focus on earnings. The most valuable acquisitions will be those that have growth in the top quartile of the industry along with an EBITDA that is also in the top quartile. Companies with these will have the highest multiples. Revenue multiples are also a function of the industry and the general character of the market. Currently, the IPO markets are doing pretty well and the overall M&A market appears to be pretty solid making multiples equally solid. In terms of industry, the media publishing industry has moderate to slow growth depending on the segment. I'm assuming there is a social or online component to your startup which would suggest that it would be part of the new growth side of the market. Generally speaking, market growth averages are at about 8% for larger companies suggesting that new entrants should be able to sustain low to mid double digit growth over a longer horizon. "Growth rates", i.e. percentages, can be meaningless for very small companies. For instance, a company that grows from $25,000 to $250,000 in a year has a massive growth rate..... but the value may be very low due to lack of track record and overall profitability. As such, it can be very hard to estimate multiples. That said, if I were putting forth a hypothetical, it would be something like the following: Assuming: The company has over $1M in revenue and is growing at an average of 12 - 15% per year. Assuming: The company is profitable, but barely, say something in the 10% EBITDA range. Assuming: The company is a service company with few assets but is not subject to significant brain drain (key people leaving would result in devaluing the company). If any of the above are wrong, it can change things significantly. Revenue multiples might be in the 0.7 - 1.15x revenue on forward looking and .9 - 1.25 on a trailing level. EBITDA Multiples could be in the 8 - 10 times on a forward looking and 10 - 12 times on a trailing level. Take it with a grain of salt because there are a lot of factors you don't mention and more information is important to make a meaningful diagnosis.

It can certainly be tough to build up a substantial follower base, starting from nothing or very little, especially if you haven't launched your product yet. But here are a few tactics to help you get in front of more people pre-launch: 1) Start sharing tons of useful content. Before you bother sending people to your Twitter feed or Facebook page, you want to make sure they'll find something valuable once they get there. If you have the time, create original content that ties into your industry, your product, or your company in some way (without directly promoting yourself, though). If you don't have the bandwidth to create your own content, find other articles from bloggers you admire or experts in your industry, and share their content. Just make sure you're putting out information that's highly relevant and valuable to the audience you're trying to attract so you can engage them once they find you. 2) Create conversation. The people who aren't following you yet aren't seeing your tweets, so how do you show them value and get them to discover you? Start a conversation! At Change Collective, we're rolling out our first course on Becoming an Early Riser. So I'll do a Twitter search for "need to wake up earlier" and find a bunch of people who are tweeting about the exact problem we're setting out to solve. By favoriting their tweets or replying with -- "That's great! We think we can help - check out our newest course & let us know what you think!" -- I'm getting our product on their radar and simultaneously providing value to them. 3) Ask for help. Start with your fellow team members, and ask them to share the company's Facebook posts or retweet some of your tweets. You can even create lazy tweets for them to share. What about your board members? Advisors? VCs? They all have a stake in helping your company grow awareness and adoption, so find an easy and appropriate way for them to help by leveraging their networks. And if you have friends and family who are excited about your business and supportive of what you're doing, they probably won't mind a friendly request to help spread the news every once in a while. Hope this helps! I just joined an early-stage startup and I'm currently building up our marketing from scratch. Happy to jump on a call and offer some tips from the trenches if you'd like. Best of luck!

As you may know, we acquired Clarity recently and have done numerous acquisitions at Startups.co so we spend a lot of time thinking about this. I've also personally been acquired a few times so I've been on both sides. With that said I think the earlier comment about how much value you can bring to the acquirer is always a great place to start. For example, if your company had $100k in sales per year, no reasonable multiple of that is going to get you into a meaningful acquisition price. So scratch that. Instead - try to determine what kind of revenue the acquirer might generate in the first and second year post acquisition. That at least gives you a starting point. What you can't do is start thinking about what Instagram sold for. None of that type of silly math matters. Those are one of conditions where a company is in such hot demand is so singular in it's value (no one else was that big at that time in that particular segment) that they play by entirely different rules. What's nice about the 'what value can we bring' discussion is that it shows that you are thinking about what's in it for them, not just what's in it for you.

There is no valuation until you sell something. An idea or a company is only worth what its sales are. Once you have your initials sales, sales strategy and forecasting length (ie 9 months from first customer lead to close) then you have a formula for valuation. Valuation for start-ups is generally 3.5 x last years sales model should be the growth factor. When you are looking for investors, you will want to have atleast 9-18 months of SALES, not just pipeline and they will be looking at 5x revenue for a 3-5 year payback.

After shepherding 300 equity crowdfunding raises through our platform I'd say all of them have a higher valuation. Reason is it is the entrepreneur that is calling the shots. It is the entrepreneurs offer on their terms on an equity crowdfunding platform. Once you get outside investors involved shaping the deal the valuation will most certainly go down. Agreed it may then be more realistic as everyone believes their company is more valuable than it is. My advice? Treat early investors fairly. Money is the lubricant to get your idea into reality. Give them a fair share of the business and they will reinvest when need be.