Selling a software company for less than $1M used to be a do-it-yourself proposition for founders. M&A advisors don’t make enough money on a deal that size to help founders with all the effort.
There are tens of thousands of these micro-SaaS businesses worldwide —maybe more than 100,000.
But now there are marketplaces that efficiently bring SaaS sellers and active buyers together, with some automation and assistance for transacting deals.
Andrew Gazdecki is the founder and CEO of acquire.com, a marketplace of buyers and sellers of smaller, profitable SaaS products with annual revenues between $100,000 and $5,000,000.
Andrew sold his own software company and learned how little support and information was available to sell a software product for under $5-10 million in deal size.
Acquire.com has helped over 2,000 entrepreneurs sell their software products for a combined value of more than $500 million.
Acquire offers additional support to help founders package, promote, negotiate, and close their transactions.
Potential buyers are vetted for financial viability and identity confirmation before getting confidential details for any deal.
Here’s how Andrew sees their typical SaaS buyers by deal size:
“There are three buckets of active buyers on Acquire.com. The first is below $100,000 net profit. That’s going to be an individual buyer looking for something with maybe a little bit of product market fit.
“They want to take the product, grow it a little bit, see what they can do from there. They’re buying a very, very early startup. So some buyers will actually start small and then work their way up.
“From $100,000 to $1 million in net profit in our middle range, the buyer will a blend of “micro PE firms” and holding companies that want to get their hands on a business where there’s a lot more going on.
“And then a $1 million in profit and above is going to be for the more traditional private equity or strategic buyers.”
In this episode, Andrew describes:
- their typical seller and buyer profiles
- the typical process for a founder to sell a profitable SaaS company
- likely multiples of profit that financial buyers offer
- founder transition periods after the sale
Check out this amazing interview with Andrew Gazdecki on the Practical Founders Podcast.
