We sold 4 projects in the last year. Here’s an explainer on how micro acquistions work.

Hi folks! In the last year and a half of building products full time, we've sold 4 and made over $150,000. We're starting a newsletter to share what we've learned in this time, and our first issue is going out today on the topic of micro acquisitions.

What are micro acquisitions?

A micro acquisition is when a founder or builder sells a micro product — e.g. a micro-SaaS, a newsletter, a directory site, or any kind of product on the internet — to a buyer.

Since solopreneurs or lean teams generally build micro-products, these acquisitions typically involve IP (intellectual property) and asset transfer, rather than a corporate transfer like large-scale M&A transactions.

This means that the product rights and brand are acquired, but not necessarily the employees. In some cases, the builder may join as the developer, or the newsletter owner may join as the growth lead, but that's the extent of it.

Why do people buy these products?

• Traffic: It isn’t that easy to acquire relevant traffic on the Internet, if your product generates decent enough organic traffic, chances are that someone will find value from it
• Cashflow: Most of these products generate a steady or growing cash flow, which can be very lucrative for buyers.
• Tech: Buying may be easier than building.
• Adjacent product: The product may help the buyer expand an existing product or can be strategic for them.

Who buys these products?

Internet entrepreneurs, indie hackers, and startups are common buyers of these products.

What's the process around a micro acquisition?

First, the buyer and seller sign an NDA, after which the seller grants access to all the data related to the product via the Dataroom (an Excel file or a group of Excel files containing all the business data, such as traffic, revenue, users, costs, etc.).

If the buyer chooses to move forward, the buyer and the seller agree on a price and sign a document called the Asset Purchase Agreement (APA). The APA is a legally binding document that outlines all the terms of the sale, including inclusions, exclusions, payment terms, support terms, etc.

Due diligence then takes place, during which all the shared data is verified.

Once complete, the asset transfer schedule kicks in, and all the assets (domain, servers, emails, etc.) are transferred while the money is placed into an escrow account.

Once the transfer is complete, the seller receives the funds from the escrow.

How do you find these buyers or sellers?

Marketplaces such as Acquire, Microns, Flippa, Tiny Acquisitions, etc.

Inbound: You can receive inbound requests if your product is popular enough.

Outbound: You can reach out to folks on Twitter who regularly buy products or to holding companies such as Tiny Capital.

VisualizeAI was sold to a Canadian startup because of an inbound request, whereas AI Pick Up Lines, HeadlinesAI, and Spark Social were sold via Acquire, Microns, and Tiny Acquisitions, respectively.

You can read the complete issue here and if we will be sharing our learnings around making money around the internet, so if you'd like to read more, consider subscribing to BuilderOS :)