Practical Founders Blog

Every SaaS founder knows their valuation multiple numbers if and when they decide to sell their companies someday. But what about the important factor of WHO YOU SELL TO? Would you sell it earlier or not take the highest offer for a ...

Most SaaS founders dream about selling their companies and having the freedom to do whatever they want. They surely get to do that after a successful exit, but few founders actually retire and stop working after a year or two out of the ...

This month, I've been talking to growth equity, private equity, and buy-and-hold investors in B2B SaaS companies about their current view of AI in the companies they invest in. Here's what they told me: 1) AI is clearly improving very ...

When SaaS founders win big on their exits, they have these things: A growing business that will be worth more next year. A sustainable and profitable business, so they won't run out of cash. Multiple offers from buyers to choose the ...

The acquisition game is very different from 10 years ago now that private equity investors or PE-owned strategic buyers lead 70% of SaaS acquisitions. Most SaaS founders aren't thinking about the new realities of eventually selling their ...

Private equity buyers (and PE-backed strategics) are the most likely home for your SaaS business, if and when you try to sell it. PE buyers now make up 70% of all software company acquisitions. This change started to grow 10 years ago and ...

Should I sell my "Rule of 40" SaaS company sooner or wait a few years?, a founder asked me last week. Here are 10 questions I asked him before I shared my thoughts: What is your current revenue and growth rate? How confident are you ...

SaaS founders stay on about 10% of the time, just two years after they sell their companies to private equity investors or strategic acquirers. That's what I've seen and experienced in hundreds of transactions over the last twenty ...

The biggest change in the exit game for practical SaaS founders in the last five years is the rise of the partial exit. Partial exits are so common today that we forget that software founders almost never did this ten years ago, and when they ...

When will high valuation multiples come back to B2B SaaS acquisitions so I can sell my company for the highest premium? Two CEOs with B2B SaaS businesses almost to $5M ARR asked me this question last week. They remember the boom time with ...

Acquirers of smaller SaaS businesses are moving slowly and taking their time this year, but valuations can still be interesting for companies that fit the buyer's strategy. That's good news for practical SaaS founders who didn’t sign up for ...

I hear the same thing over and over from practical SaaS founders I interviewed on my podcast who successfully sold their companies:  "We were profitable and growing and weren’t trying to sell our company.  We kept telling prospective ...

Should a healthy early-stage SaaS company care about profits when strategic or PE buyers value revenue size and growth rates so much more? SaaS companies are mostly valued on their revenues and growth rates and not so much on profit ...

Have you heard the tortoise and the hare metaphor used to compare bootstrapped startups to VC-funded companies? It's not as true as it used to be. The tide is turning. Grow faster with big funding! Bootstrapping takes too long! But when you ...

Why would a founder sell a steadily growing SaaS business that is increasing cash flow (real profits) every year? Some growing and profitable SaaS companies are like perpetual motion machines. They keep growing steadily and become more ...

SaaS founders with successful companies often learn what is important to serious acquirers too late in the game. What is valuable to a buyer right now is sometimes different from what was important to a founder as they grew their company. This ...

Here are the 5 biggest reasons we don't hear about 90% of the successful exits that create life-changing wealth for bootstrapped SaaS founders. The bootstrapper success stories we do hear about are just the tip of the iceberg. Big wins for ...

Selling your software company is always stressful and tricky for SaaS founders, especially for bootstrappers who don't have VC or M&A partners to lean on. Most founders who sold their companies tell me it was the most stressful thing they ...

The first founder of 30 CEOs in my Practical Founders Peer Groups just sold his business successfully last week. It was an atypical deal for an atypical founder. Bootstrapped and lightly funding founders often sell their businesses when they ...

In the last year, I interviewed 44 amazing SaaS founders and 6 expert guests on the Practical Founders Podcast. When I talk to founders now, I recommend specific podcast interviews that are relevant to their situation and their approach. I put ...

When you start your SaaS business that you eventually want to sell, should you have a theory about who will buy your company? Most tech investors will tell you not to think about your eventual exit so specifically. Just take the funding and ...

How can a bootstrapped SaaS company raise big funding without raising money from venture capital or private equity investors? By selling their bootstrapped software company to a big software company that is backed by big funding. This happens ...

M&A in the software space has slowed down in the last year, but it hasn't stopped. I'm still hearing about acquisition offers and transactions for savvy early-stage SaaS companies for multiples of 4X-7X annual recurring revenue. But these ...

Software company founders who sold their companies for big prizes tell me the same thing on my podcast: "It was great to see the money in my bank account for a day, but then it wasn't so great right after that." For some founders, it only took ...

I talked to the CEO of a serious software company this week who had an offer to buy his company. The deal was almost closed. "Is this a fair price for my company?" he wanted to know. We talked about the general trends in acquisition ...

Jeremy Clarke was living a lie when he was growing his software company. He would say, “We’re working on this…” or “We tried this and it worked.” He wasn’t being truthful at all. He told people what they wanted to hear. The lie was the ...

A software founder friend in Phoenix just asked me this common question: "Should I be responding to inbound acquisition requests that ask about our EBITDA?" His company will either double or triple in revenues this year. From single-digit ...

Investors and acquirers know there is a huge difference in company value between these two kinds of $5M ARR software companies. One kind of company will accelerate. The other kind will decelerate. What they are worth couldn't be any more ...

There's a serious question that a lot of people are asking these days after the chit-chat stops. It is asked by successful people who devoted their entire careers or invested everything to build their companies. It's starting to be asked ...

Sam Knight is a startup entrepreneur who grew a construction software business with a friend in the Dallas area. Sam and his cofounder sold their growing SaaS business in 2020 for an exciting multiple (of revenue). BOLT Software had just ...

There's a new thing happening in the software startup game that didn't happen very often just 5 years ago: Some savvy startup founders are self-funding software companies and growing them to $1M or $2M ARR in 2-3 years, Then they sell ...

As a warmup to next week's holiday, here's one thing I'm grateful for: Software companies are valued on multiples of revenue. That's pretty darn amazing. Most other companies are valued on multiples of their profit. So SaaS ...

Every week another founder friend sells their tech business. This week it was Dan Jaffe, founder and CEO of LawLytics, who sold his company to one of the largest legal software companies in the world. LawLytics is the leading website ...

Every week another founder friend sells their tech business. This week it was Joshua Strebel and Sally Strebel, co-founders of Pagely, who sold their managed WordPress business to GoDaddy. I'm very happy for both of them. They did it ...

I know 20+ founders who sold their business in the last year who didn't raise any outside funding or were unusually efficient in raising capital. These founders had a much higher "exit success" rate than other founders I know who raised big ...

You won't believe this story of successful software entrepreneurship unless you hear it for yourself. I have never seen anything like it. Nine years ago, my friend Saeed Eslami got a job with a large construction company while getting his ...

Surprised at how hard it is to raise funds for your startup or growing business? Almost every entrepreneur I know who has tried to raise money is surprised by the incredible amount of time, effort and energy needed to raise equity ...