AI app source code or a running SaaS: how to judge the price

SaaS & source code · About 9 minutes to read

“SaaS for sale” can mean two very different things. One is source code: an app you will have to launch, host and find customers for yourself. The other is a running business, with customers, revenue and costs. Both are listed side by side on most marketplaces, and they need to be priced in completely different ways.

Part 1: Buying source code

With source code you are buying a head start, not an income. What it is worth depends on how much time it saves you and how much work is still left to do.

Is it exclusive?

This is the first question to ask, because it matters most. Code sold once, with exclusive rights, is worth far more than a script sold to anyone who pays. Ask how many copies have been sold, and whether the seller will stop selling it after your purchase. Get the answer in writing.

What does the licence let you do?

Check whether you may:

• use it commercially
• rebrand it
• modify it
• resell it or offer it as a service to others

“Lifetime licence” usually means you may use the code indefinitely. It does not mean you own the copyright, and it does not cover the fees of any service the code depends on.

Is it complete?

A working product usually needs more than the core app. Check that you get:

• an admin panel
• the database schema and migrations
• a working sign-up and billing flow
• deployment instructions
• the design files behind the screenshots in the listing

Ask for a live demo, then run the code yourself before you pay. If it does not start from the instructions provided, the missing work is yours.

What will it cost to run?

Add up hosting, any paid libraries and, for AI products, the model provider's usage fees. An AI app that calls a hosted model pays for every request, so its costs rise with every user. The questions for buying an AI chatbot cover this in detail.

Part 2: Buying a running SaaS

A running business is priced on what it earns. Small software businesses are usually valued as a multiple of annual profit, often measured as seller's discretionary earnings: revenue minus running costs, with the owner's own pay and one-off expenses added back. Larger, fast-growing companies are more often priced on revenue.

Build your own profit figure

• Hosting and infrastructure
• Model or API usage, for AI products
• Email, analytics, support and other paid services
• Payment processing fees
• The hours the business needs each week, priced at what you would pay someone else to do them

Read recurring revenue with churn beside it

Monthly recurring revenue means little on its own. If 8% of subscribers cancel every month, only about 37% of today's customers are still paying a year later (0.92 to the power of 12). A business like that has to replace almost two-thirds of its customers each year just to stand still. Ask for three more things:

• Cohorts: of the customers who joined six or twelve months ago, how many still pay?
• Concentration: does one customer bring in a large share of revenue?
• Annual plans: are yearly prepayments making a single month look bigger than it is?

Verify every number at the source

Screenshots can be edited. Ask for read-only access to the payment processor. Stripe, for example, has team roles with limited permissions. Failing that, ask for a live screen-share where you tell the seller where to click. Compare the processor's payouts with bank deposits. For AI products, check the provider's usage dashboard as well, so you can confirm the costs as well as the revenue.

Risks that should lower the price

• Platform dependence. A product built on one company's API, app store or marketplace can lose its business when that platform changes its rules or its prices.
• Model exposure. For AI products, a price rise or a model retirement cuts straight into margin.
• Founder-led sales and support. Customers who bought because of the founder may leave with them.
• Technical debt. Watch for no tests, no backups, outdated dependencies and secrets committed to the repository.
• Unclear ownership. Check the code, the brand name and the domain are really the seller's to sell.

Plan the handover of paying customers early

Moving live subscriptions from one payment account to another usually needs the processor's own migration process, and that takes time. Agree early how it will be handled. Also confirm the customer list, the email list and the support inbox are included.

Where to compare asking prices

Escrozon lists AI SaaS source code and apps. The seller's side of the same maths is covered in how to price your software, which is useful for knowing how a seller arrived at the number. Whichever kind you buy, keep the payment in escrow until the code, accounts and data on your handover list are in your control.