Risks & How to Mitigate Them

Like any investment, mobile app acquisition carries risks. Understanding them clearly — and knowing which ones can be managed — is what separates informed investors from gamblers.

Platform Risk

What it is: Apple or Google could remove an app, reject an update, or ban a developer account. This is the most significant risk in the space.

Mitigation: Buy apps with long, clean App Store histories. Diversify across multiple developer accounts. Avoid apps in categories that have faced recent policy crackdowns. Apps that have lived in the store for 3+ years without issues are extremely unlikely to face sudden removal.

Revenue Decay Risk

What it is: All subscription apps experience some degree of subscriber churn. Revenue naturally declines over time unless new users are acquired.

Mitigation: This is expected and modeled into the purchase price. The valuation forecast already accounts for a declining revenue curve. The key is ensuring the model's decay assumptions are realistic — which requires looking at historical cohort data, not just recent MRR.

Forecasting Risk

What it is: The revenue forecast could be wrong. Actual churn might exceed projections.

Mitigation: Use conservative assumptions. Build the financial model on pessimistic scenarios. If the deal still works under pessimistic projections, it will almost certainly work in reality. Portfolio diversification also smooths out individual forecasting errors.

Technical Risk

What it is: App updates might be needed due to iOS/Android version changes, server issues, or bugs that emerge after acquisition.

Mitigation: Ensure you have complete source code, a working build environment, and either in-house development capability or access to a developer. Budget for occasional update costs.

Market/Competitive Risk

What it is: A new competitor could enter the niche, or user preferences could shift away from the app's category.

Mitigation: Target evergreen categories with stable demand (utilities, health tools, education). Avoid trendy or fad-driven niches. A portfolio across multiple categories provides natural hedging.

Fraud / Misrepresentation Risk

What it is: Sellers could misrepresent revenue, use bot installs, or hide known issues.

Mitigation: Always verify financials directly in App Store Connect (not screenshots). Use an escrow service. Conduct a live call with the seller. Work with a marketplace that performs independent verification before listing.