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Trying to find a home for a low MRR SaaS


#1

Hey all,

Back in 2012, DNSimple acquired RoboDomains and RoboWhois. We’ve shut down RoboDomains since it really never made any money, and now we’re considering shutting down RoboWhois. It makes a little bit of money each month (between 1000 to 2500 USD) but no one on our team is really interested in maintaining and growing it. I’ve looked for buyers but haven’t found any at a price I’d consider reasonable. I’m curious about what other options might be available and I wanted to see if any other bootstrappers have thoughts on this.

Here are the choices I’m considering:

  • Turn it off.
  • Continue trying to find a buyer.
  • Hire someone eager to build up the business from where it is today, giving them full control over it.
  • Partner with someone (or some entity) where they would get the majority ownership but Aetrion LLC (my company) would retain some percentage.

Any other ideas that I should consider?


#2

I’d wager turning it off is the worse option than selling for a price you find unreasonable. ;).


#3

Which price would you find “reasonable”?
Judging only from what I have heard/read about the topic about 2x annual net profit is what you can expect to get.

Have you considered selling it through a broker (e.g. empireflippers.com) ?

I agree with @johnf: Shutting it down is the worst option here.


#4

Well, consider that the price has to cover numerous things, such as the cost of handing over the assets, transitioning the current service hosting, time spent going back and forth with the buyer, etc. Additionally, once it’s sold we can never really bring it back, which is a not unfathomable option.


#5

What is “reasonable” is a good question. Frankly it’s probably not worth our time to sell it for 10k (for example). However it is worth our time to sell it for 70k. For 10k I may as well just shut it down and keep the assets in case we want to reopen it later when time permits.

I listed it on Flippa, but ended up not finding a suitable buyer. Partially that’s my fault as well though, since I was not working extra hard to sell it since a sale is not a need, but a nice to have for the right price option.


#6

TBH I don’t think a buyer cares even a bit about all that.
The buyer is looking purely for ROI, which usually brings us back to about 2x annual net profit.

The MRR seems to vary quite a lot, but assuming $2k/mo would bring you to about $48k to sell it.
EDIT: This is probably more on the high end, because I multiplied the assumed MRR by 24. You would normally deduct costs from MRR as well, so you’re more likely looking at $30k to $40k - all based on assumptions

Interesting reads/podcasts:
http://www.softwarebyrob.com/2014/04/02/building-a-saas-business-you-can-sell/
http://www.startupsfortherestofus.com/episodes/episode-197-how-to-sell-a-web-application-with-guest-thomas-smale


#7

Looks unreasonably high to me. Positive ROI will take forever, if ever.

Speaking of which, what is the MRR change over a few recent years? If is growing or declining?


#8

I’d be someone who would be interested in buying it, but 70k is really out there. Perhaps there are ways to lower the transition costs, like granting access to your infrastructure to the acquirer during the transition period (assuming it’s separate from your other services, naturally) rather than doing a complete cutover as part of a sale.

It sounds like the money you are making just isn’t worth the time you are spending on maintenance, so maybe you can get creative about handing over the maintenance part to a partner/acquirer and do a revenue split/gradual sale in order to minimize your time commitment.


#9

That’s an interesting approach, thanks for the idea.


#10

If this is something involves just growing the product and not getting involved in dev, I am sure you can find someone to build a business from the product.