Am I selling my mobile app business for too little?

From a different perspective, talk with your accountant and tax lawyer.  $150k/yr. is a lot easier to avoid taxes on than one lump sum payment of $400k.

I think you would be losing on this deal, particularly in terms of user base, remember that it's not only the app being acquired, but also the user base, currently this app gives you the ability to communicate with about 10000 users a month (my very rough approximations), this might seem like a little number, but remember that these users are quality active users who will probably keep using your app actively because they paid for it, they are also probably willing to pay more of your apps in the future since you have gained their trust. This user base can be monetized further, you can release more apps in the future and cross promote them to your current users, specially that you know what type of new features/apps they would be interested in. You have formed a bond with a decent number of customers, you currently have the most important factor to running a successful business and grow it larger and larger, why sell it for a flat payment and lose all the future potential?

I would probably sell. You have enough history to understand that the app won't jump sky high in revenues, those are steady more more than a year. Getting 2 years+ of revenues and eliminating all risks seems a fair deal to me. This is really depending on potential raise in sales but if it's going to stay this way, that's a fair deal.

Nice problem to have! My (half) answer would be to base your decision on how optimistic you are about hitting a bigger growth spurt in that 1 to 1.5 years time opportunity and, whether you feel up for doing that yourself. It won't take long for that to come around, if you can last that long you might be looking at a significantly different price for your business and be sitting there with the same reasons why you want to sell, the slight lack of control, the uncertainty about markets and maybe just ready to pass your business on, but with a far larger deal on the table. I hope that helps.

See this entirely depends the type of app you are selling. If it's really useful for people and you don't have considerable competition then you can raise the price a little else stick to the current one.

The answers here focus on 400k vs the value of your business, which is obviously important but how about looking at this another way, the value of 400k in cash to you now personally? Does it mean a couple of years out, a change in career to something you've always wanted to do, the chance to donate money to good causes, security for your family and friends, the chance to travel etc. You could hold on for another couple of years for more $ and in 6 months fall under a bus or you could enjoy 400k now. Another thing to consider is structuring in an earn out where you stay on with the app and have a % cut of revenue over 250k for the next two years

Usually acquisitions are at a multiple of either gross revenue or EBITDA. You should research what multiple mobile apps are selling at but I am guessing a $400k offer for an app that grosses $150k a year (a 2.666 multiple) is average, maybe the lower end of average. So not horrible but not great. If you are sick of maintaining the app and that is your only offer then it might be worth it.