What would you do buying a dead SAAS? (purchase agreement / legal costs)

[Bounce Back]

I have been in discussions with a SAAS that is basically dead (down to a single client left from never seriously launching - different story saved for another thread).

I may be moving forward with purchasing their app code, marketing website, domain name, and other digital assets. In effect I think the core of what they have shouldn't have failed and is a diamond in the rough. I do not intend to purchase their actual business (nor liabilities of any kind) and will have the one remaining client sign a new agreement with me.

I can go into more detail if needed but the purchase is in effect <$10,000 because after losing their largest client they are really just about to shut it down and I peg them as wanting to just have another "business sold" to add to their list and try to get something rather than nothing if they just shut it off. They've estimated the code has cost them $200k+ to develop and improve over the six years they ran it and I venture it would cost me ~$50k in my time to build. This same space is one that was on my short list of exploring and fits almost everything I was looking for so it is appealing to me.

With that in mind with a previous business I sold I used a business broker so legal forms were mostly used from that and I had an attorney do a quick review of that but that was low six digits and seemed like a reasonable thing to do. Am I wrong in thinking while I have plans to grow the company into something substantial that this asset purchase itself doesn't needed significant legal cost to get done? Do you all feel something like Free Asset Purchase Agreement Template: Sample & FAQs and modifying it as needed (with common sense) would be enough here? Do you feel I'd be covered enough by just being hyper specific in exactly what I am buying and being clear I am buying no other part of the business and existing liabilities, etc. remain their own?

 

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[Two Dog]

I have been in discussions with a SAAS that is basically dead (down to a single client left from never seriously launching - different story saved for another thread).

I may be moving forward with purchasing their app code, marketing website, domain name, and other digital assets. In effect I think the core of what they have shouldn't have failed and is a diamond in the rough. I do not intend to purchase their actual business (nor liabilities of any kind) and will have the one remaining client sign a new agreement with me.

I can go into more detail if needed but the purchase is in effect <$10,000 because after losing their largest client they are really just about to shut it down and I peg them as wanting to just have another "business sold" to add to their list and try to get something rather than nothing if they just shut it off. They've estimated the code has cost them $200k+ to develop and improve over the six years they ran it and I venture it would cost me ~$50k in my time to build. This same space is one that was on my short list of exploring and fits almost everything I was looking for so it is appealing to me.

With that in mind with a previous business I sold I used a business broker so legal forms were mostly used from that and I had an attorney do a quick review of that but that was low six digits and seemed like a reasonable thing to do. Am I wrong in thinking while I have plans to grow the company into something substantial that this asset purchase itself doesn't needed significant legal cost to get done? Do you all feel something like Free Asset Purchase Agreement Template: Sample & FAQs and modifying it as needed (with common sense) would be enough here? Do you feel I'd be covered enough by just being hyper specific in exactly what I am buying and being clear I am buying no other part of the business and existing liabilities, etc. remain their own?

My wife's an attorney, but we used tweaked templates for flipping properties. I like the template you posted particularly since it's fairly easy to read and includes an arbitration clause.

The real value of the attorney isn't drafting the agreement, it's explaining what all the terms mean. Then you can add or delete with more confidence. However, I've met with plenty of brokers and attorneys completely incapable of doing that.

Since you're already familiar with the buying process, I agree with you about using the template vs. attorney. Both are equally enforceable agreements. That's all that really matters. I would use an escrow service though. I'm not that trusting unless they want to transfer everything and wait to get paid.

Do you feel I'd be covered enough by just being hyper specific in exactly what I am buying and being clear I am buying no other part of the business and existing liabilities, etc. remain their own?

It should just include what you're buying.