How to know when it's time to sell your startup

The World Health Organization describes burnout at work as exhaustion, a growing distance or cynicism about the job, and doing it less well.¹ Most builders will recognise at least one of those. You leave support messages unread for days. You put off the update you promised. The notification sound makes your chest tight.

Arvid Kahl, who built FeedbackPanda with his cofounder Danielle Simpson and sold it in 2019, wrote that his main reason for selling was to get rid of the source of his anxiety and stress. He also wrote that he would probably have stayed longer if he had hired help sooner.² That's worth sitting with. If the problem is one task you hate, fix or hand over that task first. If the problem is the whole project, that's a different answer.

Rob and Sherry Walling, who wrote Exit Strategy, a book about selling a company, put it this way. Starting a sale while you're burned out is like running two marathons back to back.³ A sale takes weeks of calls, documents and questions from buyers, and a tired seller agrees to bad terms just to make it stop.

So if you're at the bottom, rest first. Take a week off. Turn off the alerts you don't need. Then decide. If you still want out when you've slept properly, believe it.

Growth is what buyers pay for. In one episode of his podcast, Rob Walling said a project that grows twice as fast can sell for many times more than one being run only for cash, and that a shrinking app gets a lower multiple.⁴

That gives you a timing rule. Sell while the line is still going up, or at least holding. If you've tried three things to grow it this year and nothing moved, ask yourself honestly whether a fourth idea is coming. A buyer with more time or money, or an audience you don't have, might get it moving again. If the graph has already started to fall, waiting usually costs you.

Sometimes the project is fine and your life has changed. A full-time job offer in Lagos. A master's abroad. A new idea you can't stop thinking about. A baby on the way.

Running two projects badly helps nobody. If the new plan is clearly where you want to be, a sale lets the old project keep going for its users instead of dying slowly while you're busy elsewhere. Write down what you would do with the time if the project were gone tomorrow. If the answer comes fast, you probably know.

Walling has said that when he sold, he asked whether the money was worth the time he'd be giving up.⁴ For a small app, turn that into a sum. Divide the offer by what the project makes you in a month. An offer of ₦6m on an app that clears ₦200,000 a month is 30 months of profit, paid today. If you were going to move on within a year anyway, that's hard to beat.

An offer you didn't ask for also tells you people want what you built. Two in the same month means more are out there. Take the calls. Nobody can make you say yes. Our guide to valuing an app that makes money shows how buyers do the sum.

A bad month. A rude customer on Twitter. A competitor with a loud launch. Your friend sold his app and now posts about it every day. All of these feel big on a Tuesday night, and most are forgotten by the end of the month.

So give it 30 days. Write the reason down today and read it again in four weeks. Still true? Then it's real.

Once the money moves and the buyer has the code, you can't take it back. The Wallings say founders who have a life outside the company (family, friends, other work they care about) tend to cope better afterwards.³ Two questions help here. Could the project run for a month if you vanished? Buyers pay more when it can. And what are you doing on the Monday after the sale? A rough direction is enough.

If you have a cofounder, talk early. You may not agree about selling, and it's better to find out now than in front of a buyer.

On Prow: Posting your project on Prow is free, and so is connecting revenue to prove it. When you decide to sell, a listing costs a one-off ₦10,000 for an Early-stage project or ₦25,000 for Basic. Buyers make offers, and the money is held in escrow with EscrowPay until they confirm they have everything. When it sells, you and the buyer each pay Prow 1.5% of the price, at least ₦5,000 each, and EscrowPay's own fee is split between you.

• You've named the real reason you want to sell, and it has lasted a month.
• You took a break before deciding.
• The numbers are still flat or rising, not already falling.
• You know what you'd do with the time.
• You've compared any offer with what the project earns you now.
• The project can run without you, and your cofounder agrees.