--- name: sales-side-project-valuation description: "Side project valuation strategy — pricing, revenue multiples, what buyers look for, deal structuring, and marketplace selection for selling or buying a side project. Use when pricing a side project you want to sell, evaluating a project you want to buy, deciding between Acquire.com/Flippa/TrustMRR/SideProjectors/1Kprojects/Microns/Little Exits, structuring earnouts or seller financing, preparing a listing, running due diligence, or comparing revenue multiples for micro-SaaS. Do NOT use for early-stage fundraising (different problem — equity not acquisition), ongoing operations (use /sales-digital-products or /sales-funnel), or platform-specific help on SideProjectors (use /sales-sideprojectors)." argument-hint: "[describe your side project sale, purchase, or valuation question]" license: MIT version: 1.0.0 tags: [sales, side-project, valuation, acquisition, marketplace, strategy] --- # Side Project Valuation & Sale Strategy Help the user price, sell, buy, or structure a side project acquisition. Covers valuation methodologies (revenue multiples, cost-based, comparable sales), marketplace selection (matching deal size to the right marketplace), due diligence, and deal structuring (cash vs earnout vs seller financing). This skill is tool-agnostic — it references specific marketplaces for where to list but focuses on the underlying strategy. ## Step 1 — Gather context If `references/learnings.md` exists, read it first for accumulated knowledge. Ask the user: 1. **What's your role?** - A) Seller — I want to sell a project - B) Buyer — I want to buy a project - C) Both — I'm negotiating a specific deal - D) Researching — I want to understand the market 2. **What's the project stage?** - A) Pre-revenue (MVP, users but no revenue) - B) Early revenue ($1-$500/mo MRR) - C) Small but steady ($500-$5K/mo MRR) - D) Meaningful ($5K-$50K/mo MRR) - E) Profitable SaaS ($50K+/mo MRR) - F) Abandoned / no longer maintained 3. **What's your primary question?** - A) How do I price this project? - B) Which marketplace should I list on? - C) What do buyers look for in due diligence? - D) How do I structure the deal (cash, earnout, seller financing)? - E) How do I run due diligence as a buyer? - F) How do I transfer the project post-sale? - G) Other — describe it Skip-ahead rule: if the user's prompt already provides enough context, skip to Step 2. ## Step 2 — Route or answer directly | Problem domain | Route to | |---|---| | SideProjectors-specific listing help | `/sales-sideprojectors {user's question}` | | Digital product sales (selling an ongoing product, not the project itself) | `/sales-digital-products {user's question}` | | Product launch directory strategy (getting exposure before selling) | `/sales-launch-directory {user's question}` | | Audience growth for the project | `/sales-audience-growth {user's question}` | | Newsletter-as-asset valuation | `/sales-newsletter {user's question}` | Otherwise, answer directly below. ## Step 3 — Marketplace reference For marketplace-specific guidance (fees, buyer quality, deal size fit, escrow, typical timeline), read `references/platforms.md`. Answer using only the relevant section — don't dump the full reference. You no longer need the platform reference — focus on the user's specific situation. ## Step 4 — Actionable guidance ### Valuation methods (pick what fits the stage) **Pre-revenue projects** — buyers heavily discount no-revenue projects: - Base: development time × hourly rate × 10-20% - Example: 200 hours × $75/hr × 15% = $2,250 - Add premium for: working product with live users, clean code, transferable domain, unique tech - Realistic range: $100-$5,000 for most pre-revenue side projects **Revenue-generating projects** — multiples of annual revenue (ARR): | Profile | Typical multiple (ARR) | |---|---| | Side project, flat revenue, no growth | 1.0-1.5x | | Side project, stable, small growth | 1.5-2.5x | | Small micro-SaaS, clear growth | 2.5-4x | | Profitable SaaS, 20%+ growth, low churn | 4-6x | | Private lower-middle market SaaS (broker-sold) | 4-7x (median ~4.5x in 2026) | **Premium drivers** (push toward top of range): - Net Revenue Retention (NRR) >110% - Rule of 40 (growth % + profit margin %) >40 - Low customer concentration (no customer >10% of revenue) - Recurring revenue >70% of total - Clean, documented code and stack - Transferable integrations (no personal API keys, accounts) **Discount drivers** (push toward bottom): - Customer concentration >30% from one customer - High churn (>5% monthly) - Founder-dependent (personal brand, relationships) - Platform-dependent (Shopify app, ChatGPT plugin) - Messy code, no docs, no tests - Tax, legal, or IP uncertainty ### What buyers look for **Financials** (verified, not self-reported): - 12-24 months of revenue history (Stripe / payment processor statements) - MRR / ARR trend line - Churn rate and NRR - Cost structure (hosting, APIs, support time) - Profit margin after true costs **Product and code**: - Working product with a live URL - Clean codebase, documented setup - Tech stack that's transferable (avoid obscure dependencies) - No personal accounts baked in (API keys, domains in founder's name) **Customers and market**: - Customer list with acquisition channels - Analytics (Google Analytics, Plausible, Mixpanel access) - Support tickets and customer sentiment - Competitive positioning **Legal and transfer**: - Clean IP ownership (no unlicensed code or assets) - Transferable domain, trademarks, accounts - No open disputes, complaints, or refund chargebacks - Privacy policy / terms compliance (GDPR, CCPA if applicable) ### Deal structuring | Structure | Seller gets | Buyer gets | Best for | |---|---|---|---| | All cash | Full price at close | No deferred payments | Small deals, low-risk, clean transfer | | Cash + earnout | Base + upside if targets hit (3-24 months) | Downside protection if revenue drops | Growth-stage or uncertain retention | | Cash + seller note | Down payment + monthly over 3-7 years with interest | Lower upfront capital | Mid-size deals where buyer needs financing | | Equity rollover | Cash + stake in new owner's business | Aligned incentives, founder transition | Larger deals, strategic acquirers | **Typical structure for side projects under $50K**: 100% cash at close via escrow. Earnouts make sense above $50K or when the project's future revenue is uncertain. **Escrow** — never skip it for deals over $500. Use Escrow.com, Tranferslot, or marketplace-built-in escrow (Acquire.com, Flippa). Side project deals without escrow are the #1 source of scams. ### Matching deal size to marketplace | Price range | Best marketplace fit | |---|---| | Under $1,000 | 1Kprojects, SideProjectors, Little Exits, Indiemaker | | $1,000-$5,000 | SideProjectors, Microns, Little Exits, Indiemaker | | $5,000-$50,000 | Microns, Acquire.com, Indiemaker, Flippa, TrustMRR (if verified-revenue provider) | | $50,000-$500,000 | Acquire.com, Flippa, Empire Flippers, TrustMRR (lump-sum only) | | $500,000+ | Empire Flippers, FE International, broker-assisted | | $200K–$20M net profit (ecom/DTC/FBA/newsletter) | Ecomswap (boutique ecom-specialist advisory), Quiet Light, Empire Flippers | Read `references/platforms.md` for per-marketplace detail (fees, buyer verification, escrow, typical timeline). ### Listing checklist (seller side) 1. **Clean up financials** — export 12-24 months of Stripe/payment data, normalize revenue 2. **Document the business** — what it does, who uses it, how they find it, cost to run 3. **Screenshots and demo** — product in action, dashboard, key features 4. **Metrics page** — MRR trend, user growth, churn, traffic sources 5. **Transfer plan** — domain, hosting, Stripe, API keys, analytics, social accounts 6. **Asking price with rationale** — show the multiple and comparables 7. **Cross-list** — don't rely on one marketplace; list on 2-3 that fit your size ### Due diligence checklist (buyer side) 1. **Verify revenue** — screenshare Stripe/PayPal/payment provider dashboard (don't trust screenshots alone) 2. **Verify traffic** — Google Analytics access, not just screenshots 3. **Review code** — get read-only GitHub/repo access before close 4. **Check customer concentration** — how much revenue from top 5 customers? 5. **Churn deep-dive** — last 6 months of cancellations, reasons 6. **Technical audit** — hosting costs, API dependencies, security, scalability 7. **Legal check** — IP ownership, open-source license compliance, ToS/privacy 8. **Transfer rehearsal** — dry-run the handover before paying 9. **Escrow the payment** — Escrow.com or marketplace-native 10. **Post-sale support** — negotiate 30-90 days of seller availability If you discover a gotcha, pricing benchmark, or negotiation tactic not covered in `references/learnings.md`, append it there with today's date. ## Gotchas - **Side project multiples are lower than VC-backed SaaS multiples.** Public SaaS trades at 3-7x revenue; side projects trade at 1-3x ARR unless there's genuine growth. Don't anchor on headlines about $100M acquisitions. - **Revenue history quality matters more than the number.** 12 months of verified Stripe data beats a 3-month spike. Buyers heavily discount unverifiable revenue claims. - **Customer concentration silently kills deals.** A $10K ARR project with 40% from one customer will trade 30-50% below the same project with diversified revenue. Mention it proactively or buyers will find it. - **"Abandoned" projects sell for development-cost multiples, not revenue multiples.** If you haven't touched the code in 6 months, buyers assume tech debt, lapsed integrations, and support backlogs. Be realistic. - **Earnouts often don't get paid out fully.** Industry data: <50% of earnouts pay at full target. If you accept an earnout, price it like you'll only see the upfront cash. - **Transfer friction is real.** Domain transfers can take 60+ days; Stripe accounts don't transfer (buyer needs a new one); OAuth tokens expire. Build a written transfer plan before signing. - **Most side project marketplaces don't verify buyers.** SideProjectors, 1Kprojects, and Little Exits have no verification. Acquire.com and Flippa have partial verification. Vet buyers yourself with a video call before sharing sensitive details. - **Tax consequences can surprise sellers.** A $50K sale may be taxed as capital gains, ordinary income, or asset sale depending on structure and jurisdiction. Consult a tax pro before signing. ## Before recommending a specific platform skill This skill covers a strategy domain across many marketplaces. **Before pointing the user to any specific platform skill** (any `/sales-{platform}` listed in `## Related skills`), read that platform skill's actual `SKILL.md` first. The 1-line description in `## Related skills` is enough to *identify* a candidate — it's not enough to *commit* to it or to write a prompt that invokes it well. **How to read it:** - If `~/.claude/skills/{skill-name}/SKILL.md` exists locally, `Read` it. - For `sales-*` skills, `WebFetch` from: `https://raw.githubusercontent.com/sales-skills/sales/main/skills/{skill-name}/SKILL.md`. **After reading,** ground your recommendation in something concrete from the SKILL.md. Align any generated invocation with the skill's `argument-hint`. If the platform skill turns out not to fit, swap to another or handle the question here directly. ## Related skills - `/sales-acquire` — Acquire.com platform help (curated SaaS marketplace, 500K+ verified buyers, NDA-gated listings, Escrow.com integration) - `/sales-flippa` — Flippa platform help (largest open marketplace, tiered listing packages $29-$699, 3-10% success fees, auto-verification above $50K) - `/sales-trustmrr` — TrustMRR platform help (verified-revenue marketplace with live Stripe/LemonSqueezy/Polar/Paddle/etc. API verification, APA-only lump-sum deals, $29-$499 boost tiers) - `/sales-sideprojectors` — SideProjectors platform help (free peer-to-peer, DR69 backlink, no escrow) - `/sales-ecomswap` — Ecomswap platform help (boutique sell-side M&A advisory for profitable Shopify/FBA/DTC/newsletter/content exits, $200K+ net-profit floor, SDE-based valuation, curated private buyer sourcing) - `/sales-startupage` — StartuPage platform help (founder-ecosystem platform where acquisition is 1 of 4 opportunity types; verified MRR via Stripe/LemonSqueezy/Polar/RevenueCat/Dodo; best as a secondary listing for cross-posting rather than primary marketplace) - `/sales-arrfounder` — Arrfounder platform help (social-proof founder directory pulling MRR/ARR from Twitter/X bios — not a marketplace, useful as a comp-check/discovery tool before pricing a sale) - `/sales-digital-products` — Sell digital products (ebooks, templates, SaaS downloads) instead of selling the project itself - `/sales-launch-directory` — Launch across startup directories (relevant before selling — buyers discover projects through PH, BetaList, etc.) - `/sales-audience-growth` — Grow an email list or user base (audience is itself a valuation driver) - `/sales-newsletter` — Newsletter monetization (newsletters sell as assets too — separate valuation playbook) - `/sales-funnel` — Build sales funnels for the ongoing product (not selling the project itself) - `/sales-do` — Not sure which skill to use? The router matches any sales objective to the right skill. Install: `npx skills add sales-skills/sales --skill sales-do` ## Examples ### Example 1: Price a micro-SaaS with $400 MRR **User says**: "I have a Chrome extension making $400/mo MRR for the past 8 months. I want to sell it. What's it worth and where should I list it?" **Skill does**: 1. Calculates ARR ($4,800) and applies side-project multiple: 1.5-3x = $7,200-$14,400 2. Notes Chrome extension = platform-dependent (discount slightly — policy risk) 3. Recommends listing at $12,000 with room to negotiate down to $9,000 4. Suggests Acquire.com (best for SaaS), Microns (0% commission, right size), and Little Exits (indie hacker audience). Cross-list for maximum reach. 5. Reminds about escrow and documenting the Chrome Web Store transfer process **Result**: User has realistic pricing, a shortlist of 3 marketplaces, and a listing prep checklist. ### Example 2: Buyer due diligence on a $30K project **User says**: "I'm looking at buying a newsletter business for $30K. It claims 8K subscribers and $1K/mo in sponsorships. What should I verify?" **Skill does**: 1. Calculates implied multiple (30x MRR / 2.5x ARR — on high side for newsletters) 2. Lists verification steps: actual subscriber count (ESP screenshare), open rates, sponsor contracts and renewal likelihood, churn, subscriber acquisition cost 3. Warns about newsletter-specific risks: sponsor concentration, deliverability reputation tied to sender, founder-as-voice risk 4. Recommends 30-60 day seller support clause and partial earnout based on subscriber retention 5. Points to `/sales-newsletter` for newsletter-specific operating guidance post-purchase **Result**: Buyer has a verification checklist and a deal structure proposal that de-risks subscriber retention. ### Example 3: Choose between Acquire.com and Flippa **User says**: "I have a $25K/year SaaS. Should I list on Acquire.com or Flippa?" **Skill does**: 1. Reads `references/platforms.md` for the comparison 2. Notes Acquire.com: curated, NDA-gated, 500K+ buyers, $390/yr buyer tier (many serious), 0% seller fee 3. Notes Flippa: open marketplace, 5% success fee, broader audience (more tire-kickers), listing fees 4. For $25K ARR SaaS: recommends Acquire.com as primary (SaaS-specialized, curated), Flippa as secondary if Acquire.com listing gets no traction after 30 days 5. Warns that Acquire.com rejects listings under $10K and curates heavily — listing quality matters **Result**: Clear primary + secondary marketplace recommendation with reasoning. ## Troubleshooting ### Listing has been up for months with no offers **Symptom**: Listed on a marketplace but no serious buyer inquiries **Cause**: Price too high for the profile, weak listing (missing metrics, screenshots, or rationale), or wrong marketplace for the deal size **Solution**: Drop price 20-30% and see if inquiries pick up — the market is telling you the price is too high. Audit the listing: does it show 12 months of verified revenue? Does it have a transfer plan? Cross-list on 2-3 marketplaces that match your deal size (see `references/platforms.md`). If it's abandoned, reframe as "starter project" rather than "abandoned" — buyers fear the latter. ### Buyer wants a big earnout, seller wants all cash **Symptom**: Deal stuck on structure — buyer proposes 40% cash + 60% earnout, seller wants 100% cash **Cause**: Misaligned risk assessment — buyer sees retention/growth risk, seller sees earnout as unlikely to pay **Solution**: Meet in the middle with 70-80% cash + 20-30% earnout on a short (6-12 month) window with achievable targets (90% revenue retention, not growth). If revenue is genuinely stable and verifiable, seller can push for all cash by providing stronger transition support (60-90 days of availability). If buyer won't budge, the price is probably right and the structure is the concession. ### Buyer or seller is trying to skip escrow **Symptom**: One party pushing for direct wire transfer "to save fees" **Cause**: Either inexperience or (worst case) scam intent — legitimate buyers/sellers understand escrow protects both parties **Solution**: Refuse. For any deal over $500, insist on escrow — Escrow.com charges 0.89-3.25% and prevents irreversible fraud. Marketplace-built-in escrow (Acquire.com, Flippa) is often included in the platform fee. If the counterparty refuses escrow, walk away — this is the single most common side project scam pattern.