Founders negotiate the price of an app hard and then sign a purchase agreement they have read once. That is backwards. The headline price is the number you tell people; what you actually keep is decided by terms that show up after the price is agreed, and most of them are specific to how apps make money and change hands. Here are five worth understanding before a buyer puts them in front of you.
1. Prepaid annual subscriptions are a liability the buyer will price
If a meaningful share of your revenue comes from annual plans, a chunk of the cash you have collected is for service you have not yet delivered. To a buyer that is deferred revenue — an obligation they inherit the day they take over, with no cash attached to it, because you already have the cash. Expect them to ask for an adjustment: a credit against the price, or a working capital mechanism that accounts for it. The founders who are surprised by this are the ones who treated annual billing as pure upside. It is real revenue; it is also a delivery obligation, and the buyer will treat it as one.
2. When the money moves is tied to when the accounts move
In an app deal, closing is not one moment. The App Store and Google Play developer accounts, the domain, the RevenueCat or Stripe setup, the ad network accounts, the code repository — each transfers on its own timeline, and the store transfers in particular can take days or weeks and occasionally fail. Buyers respond by staging the payment: a portion at signing, the balance once the accounts are verified in their control, often with an escrow agent holding the funds. That is reasonable. What you want in writing is exactly which transfers trigger which payments, what happens if a transfer stalls for reasons outside your control, and how long the buyer has to complete their side of it.
3. If you carry paper, know which kind
A buyer who cannot or will not pay everything at close will propose one of two things, and founders often treat them as interchangeable. They are not. A seller note is a fixed obligation: a set amount, on a schedule, with interest, owed regardless of how the app performs. An earnout is contingent: it pays only if the app hits targets after you have handed over the controls. If a buyer wants to defer part of the price because they are short on cash, a note is the right instrument. If they want to defer it because they doubt the numbers, that is an earnout conversation, and you should be asking what specifically they doubt. Do not let a financing gap get dressed up as a performance question.
4. How the earnout metric is defined decides whether it pays
When an earnout is the right answer, the definition is everything. "Revenue" can mean gross store sales, net of the platform's cut, net of refunds and chargebacks, or net of the buyer's marketing spend. MRR can be measured on the day of the month that flatters or the one that does not. And whoever controls the acquisition budget after close controls whether the target is reachable at all. A well-drafted earnout names the exact metric, the exact data source, the measurement dates, and the buyer's obligation to keep marketing and supporting the app. A vague one is a payment the buyer decides on later.
5. How the price is allocated is a tax outcome
Most app sales are asset sales, and the purchase agreement will allocate the price across categories: the software and IP, the user base and customer relationships, goodwill, and often a non-compete. That allocation is not a formality. Different categories are taxed differently for you and treated differently for the buyer, so the two sides have opposite preferences, and the buyer will often propose a schedule that suits them. Get your own tax advice before the LOI, not after the purchase agreement arrives, and treat the allocation as a negotiated term rather than a line for your accountant to fill in.
The takeaway
The purchase price is the beginning of the math, not the end. Deferred revenue on annual plans, payments staged around account transfers, the choice between a note and an earnout, how the earnout metric is written, and how the price is allocated will each move your real proceeds — usually after the headline number has been agreed and your attention has moved on. Read the agreement the way the buyer's lawyer wrote it, and negotiate the terms with the same energy you gave the price.
