Basil Peters angel investor and Principal Strategic Exits Corporation
“When can [one] sell?  [With] M&A [merger & acquisition] exits  the real threshold is to ‘prove the business model’. [To prove the model]  a recurring revenue business  [should show] actual results for: revenue per customer, gross margin per customer, customer lifetime (or churn [i.e., how long one enjoys that customer]) [and] cost of customer acquisition. In other words, how much is a customer worth and what do[es] [a customer] cost to acquire?
[With that proven model],  credible projection[s] [can be built] that [show] if: new owners added $X millions of capital, the business would have Y customers and be worth $Z millions.
That’s when [one] can sell [although] there are often additional factors like competitors and market changes.  As soon as [one] prove[s] the model is often the best time to sell. [It’s] always best to sell on an upward trend. Sell[ing] on the promise, not the reality [is] often when [one] [gets] the best price.” Basil Peters, Maximizing Exit Value Angel Capital Assn Annual Summit Workshop Apr. 15, 2009; http://www.basilpeters.com/Presentations/Maximizing_Exit_Value_20090415_Part_2.pdf , pg 5-10