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 great home for your customers and employees?
- Would you choose the buyer you can see yourself working with for the next few years?
A 5X multiple of ARR is a practical B2B SaaS mid-point, with markups and markdowns for size, growth and churn rates, timing, and other factors.
Brian Kesselman is co-founder and now the CRO of Skematic, a compliance management and workflow software for financial services firms.
Brian was a lawyer who helped manage internal compliance in highly regulated financial asset management companies.
He took a job selling compliance software and broke sales records before starting Skematic with a coworker and launching in September 2022.
Skematic grew quickly by solving an acute problem for lawyers and compliance execs just like him in his industry.
The company became profitable quickly as Brian focused on outbound selling with cold calls and savvy demos to busy compliance executives.
They grew fast, were profitable in just over a year, and attracted attention from potential acquirers.
In June 2024, FRT, a large legal software company, acquired Skematic for an undisclosed amount, including some cash and incentives.
Brian and his cofounder still run Skematic and enjoy being part of a bigger software company owned by a private family office that is highly aligned with their culture and values.
“My co-founder Charles and I had worked at a number of PE-backed software companies. And we had our own opinions about what it’s like to work at a PE-backed company.”
“The family office structure is very different from a private equity firm across the board. They’re looking typically to build profitable cash-producing assets.
“That enables our team to think long-term, which benefits not only the founders and the people that are still participating in the upside of the business.”
In this case, Brian and his cofounder got a great offer, but they decided to join FRT because they aligned with the values and approach of the FRT CEO and leadership team.
They found a great home to achieve the big vision of Skematic, and they are getting the support to scale the business up efficiently.
Brian described how this Practical Founders Podcast inspired him to quit his job to start Skematic and grow efficiently without outside funding.
Now he’s on this podcast with a practical founder success story!
Check out this unusual interview with Brian Kesselman on the Practical Founders Podcast.
