How do you value a business with users but no revenue?
The short answer
A business with no revenue has no profit to multiply, so price comes from three things: what it would cost to rebuild, what the user base is worth to someone who can charge, and how plausible the monetisation path is. Cost per monthly active user is the usual comparison unit.
What is a business with users but no revenue worth?
It is worth whatever the three inputs add up to: replacement cost, the user base, and the monetisation path. None of those is a multiple, because there is nothing to multiply. In the $10,000 to $50,000 band this is the normal shape of an asset, and pricing it well is a different skill from pricing a business with trailing earnings.
Start by accepting that you are buying an option rather than an income. The price you pay is the cost of holding that option, and the return depends entirely on what you do next.
Why does a profit multiple not apply here?
Multiples attach to trailing profit, and zero times anything is zero. Anyone who quotes you "2 to 4 times" on an asset with no earnings is either applying the wrong tool or hoping you will not notice. Revenue multiples fail for the same reason. The convention exists for businesses with a trading history, and this asset does not have one.
What replaces it is arithmetic you can actually check. Each of the three inputs produces a number, and the sensible price sits where they agree.
What would it cost to build the same thing again?
Replacement cost is what a competent builder would spend in time and money to reach the same position from nothing, and it sets the floor. Count the code, the design, the content, the domain, any integrations that took approval, and the months of calendar time. A working iOS and Android app with accounts, payments plumbing and a year of App Store reviews is not a weekend of work, whatever the codebase looks like.
Time is the part people undercount. Six months of build at a realistic contract rate is a real number, and the buyer is also skipping six months of waiting. Price the waiting, not just the hours.
What is the user base worth?
Take the price and divide it by monthly actives, or by monthly sessions for a content asset, and compare the result against what it would cost to acquire those people through advertising. That is the whole test. If an asset prices at $20 per monthly active user and paid acquisition in the same category costs $4 a signup with a 30% activation rate, the asset is expensive. If acquisition costs $35 a user, it is cheap.
Registered accounts are not users. Ask for monthly actives on a defined event, not logins, and ask for the trend across twelve months.
What do the three inputs look like on real assets?
Three assets at different points of the band, priced the way a buyer should read them.
| Asset | Price | Base | Unit price | What the unit means |
|---|---|---|---|---|
| Mobile app, 12,000 installs, 900 monthly actives | $18,000 | 900 MAU | $20.00 per monthly active | Reasonable if the category's paid install cost is above $3 and retention is flat |
| Content site, 25,000 monthly sessions, no advertising | $22,000 | 25,000 sessions | $0.88 per monthly session | Fair for search traffic on commercial terms, high for social referrals |
| B2B tool, 340 free accounts, no pricing page | $35,000 | 340 accounts | $102.94 per account | Cheap if 8% convert at $40 a month, expensive if the accounts are trials that lapsed |
The B2B example shows why the unit price alone settles nothing. Three hundred and forty accounts at $103 each looks steep until you notice that 27 of them converting at $40 a month would return the whole price inside three years, and that a tool used by named companies is a shorter distance from revenue than an app used by anonymous consumers.
How plausible is the monetisation path?
Plausibility is measured by how many things have to go right, and the honest answer is usually "more than the seller thinks". A path that needs only a pricing page and a billing integration is strong. A path that needs a rebuild, a new audience and a behaviour change from existing users is not a path, it is a plan.
Score it on four questions before you price it:
- Do the current users have the problem you intend to charge for, or a different one?
- Has anyone in this category charged successfully for the same thing?
- What has to be built before the first invoice goes out, and how long does that take?
- What proportion of the base can you afford to lose when free becomes paid?
Assume heavy attrition at the moment you introduce a price. A free base converting at 2% to 5% is normal, and anything above 10% needs evidence rather than optimism.
What turns this into an asset that sells on a multiple?
Twelve months of consistent collected revenue, and nothing else. Once an asset has a trading history, it stops being priced on replacement cost and starts being priced on trailing annual profit, which is where the numbers change shape. A micro-SaaS at the conventional 3× needs roughly $33,000 of annual profit to clear $100,000, so the operator who buys at $35,000 and reaches $2,750 a month has done something significant.
That is the ladder, and it is the reason this band is a starting point rather than a cheaper version of the same thing. Buy the option, charge for the product, hold it long enough to have a trailing twelve months, then price it properly.
Related: asset-based-valuation, replacement-cost, cost-per-user, how-much-profit-to-exit-at-100k
See what a business at this level is listed at.
Everything on sale between $50,000 and $150,000, on the same fields.