Most active acquirers of smaller, bootstrapped software companies in 2026 aren’t making M&A bets on specific AI approaches and timelines.
They are betting on the next best thing: acquiring high-potential companies with extremely sticky core revenue.
This steady revenue base gives them time to find the right AI leverage over the next few years.
Mike Lyon is the founder and managing director of Vista Point Advisors, a boutique sell-side investment bank he started almost sixteen years ago.
A former chemical engineer who later joined Citigroup’s tech M&A team, Mike built Vista Point to solve a conflict of interest he watched play out on Wall Street: bankers quietly working both sides of a deal.
Vista Point Advisors represents founder-led software companies only, never the buyers. And they focus on vertical SaaS with enterprise values between $30 and $300 million.
Mike and five other managing directors run about a dozen deals a year, spending 50 to 100 hours cleaning up each company’s data before launch and running a long, non-exclusive process built to keep multiple buyers competing to the finish.
Mike says buyer criteria changed this year for the first time in a decade, and changed fast.
Buyers now demand roughly 90% gross retention as a proxy for AI resilience, favor systems of record with real data moats, and discount horizontal point solutions.
Make recommends all founders understand exactly how you’ll be graded long before you go to market, because the aperture for a premium exit keeps shrinking.
“For the first time in ten years, the rules have changed, and they changed fast. If you called any private equity or strategic buyer over the last decade and asked what makes a good SaaS company, the answer barely moved. This year I’ve had conversations I’ve never had before, where the criteria shifted week to week — first it’s X, then X plus Y, then X plus Y plus Z.
“The first big change is a maniacal focus on gross revenue retention (GRR). Net retention (NRR) was the star for years, but gross gives you no credit for upsells — you only get dinged for downgrades and churn, so it’s really asking what happens if you can’t upsell anymore.
“Buyers want to see 90% or better GRR now, and our read is that it’s a proxy for AI risk: they don’t fully understand the AI threat yet, but they know a business at 90% gross retention is probably resilient enough to take some hits and survive.
Check out this valuable interview with Mike Lyon on the Practical Founders Podcast.
