ew ISP, you are doing well. Imperfect as it may be, the subscriber value method is a good place to start in determining an asking price. Some of the major factors that help determine a value per subscriber are The size of your subscriber base (bigger is better) Your average revenue per subscriber Your geographic POP situation in relation to the buyers needs The percentage of your subscribers paying by credit card or electronic draft (as opposed to printing invoices or terms) Your growth rate in terms of your marketing flywheel and its capability to keep bringing in new subscribers after the deal is made Your churn ratio (lower is better) Affiliate, associate, or computer dealers signed up to hawk your services Who will be paying your early circuit- or service-termination expenses, if any TIP: For the typical ISP with around 2,500 subscribers, the going rate (July 1999) is between $150 and $400 per subscriber. Your mileage may vary. The larger you are, the more power you have to fetch higher valuations. Chapter 1 A.3.2 Physical Assets Note that the previous discussion says nothing about the value of your net- work, servers, dial-up access switches, vendor agreements, or anything other than customer/subscriber information. Some buyers will ask for these assets to be lumped into the deal, but you could sell them separately-or, if it is part of the whole deal, you could sell them itemized, so you know what you are getting for them. A.3.3 Those Pesky Details Finally, the following are a number of items that many ISPs fail to think about or plan for when they sell out: Getting paid, post deal, for additional subscribers that keep coming from the marketing flywheel you spent years building A low conversion rate to the new ISP because the transition was not handled carefully or smoothly Early T1 or circuit termination, or lease shutdown charges (these can add up to tens of thousands of dollars) Yellow page and other marketing costs under contract for the remaining year on which you forgot to get your new buyer to pick up