A CEO of a bigger company has contact me today asking if I am interesting in selling my Android application. He is asking for the numbers straight away and how much I want to sell it for.
The app has been in the market for almost a year. These are the earnings from the app for the last three months
How can I workout how much it is worth?
Should I tell him the earnings, and number of users etc?
DO NOT GIVE HIM NUMBERS!!!!
Until he signs an NDA, beyond that do not discuss any operations until a Letter of Intent is signed.
What usually is of interest in an M&A are full details. I.E. your financial statements, your accountant would need to work those out, but they are for later.
What he likely needs is earnings, i.e. revenue, and expenses. To basically see what is profitable.
They will also likely need a number of users, number of paid users, etc
As far as estimates go, it's difficult to figure out. Rule of thumb it's 3 years EBIDTA, but gets wayyy more complicated with intellectual property, branding, etc