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Offers to buy SAAS outright


#1

I’m curious about others’ experiences with offers to buy their SAAS outright. In the last few months I have had three different companies approach with reasonable offers to buy me out. (reasonable being based on X multiples of current revenue). My revenue isn’t at a point that the offers were for serious consideration given the amount of time, effort and money I have already invested. They did however have an effect on my thoughts about were my business is going. If outside companies with limited knowledge of my metrics are making an attempt to enter discussions about a possible purchase they are seeing value that at times I have questioned myself, both in the market and in my product. It’s given me a little extra fire in the belly to keep pushing forward as a scrappy underdog. Have other people had similar experiences, if so what was your thought process?


#2

Early in Poker Copilot’s history, I had random unspecified offers of investment. I turned them down, because I didn’t want to be beholden to anyone else but it was a nice feeling…


#3

So these were unsolicited offers right? Curious about who approach you like that - is it competitors or people in the same space or companies who buy up lots of SaaS or something else?


#4

Completely out of the blue. All three appeared to be companies that either broker deals or buy up assets and operate them.


#5

Do you think any of these could be scams? (genuine Q - I am not saying they are, just something my suspicious mind would be thinking)

I know of people operating physical businesses who have been burned by a “we’ve got interested buyers queuing up, need to pay initial 1k fee to produce sales memorandum etc which will be taken off your final x% bill after sale”. and of course never hear from them again.


#6

I thought the same thing. The first company looked legitimate but questionable, the second two looked completely above the board. We had multiple emails back and forth and they both gave offers based on what would be considered normal ranges for the revenue I’m generating.

I’m wondering if companies are starting to search for under optimized small saas companies they can buy relatively cheap. Then they can pump some cash and a little overhead into it and keep a steady stream of income coming in. A bunch of small streams turns into a river eventually.

My personal thought is even if I can’t live full time off my service right now it does help to diversify my income, much like different investments.


#7

I did hear about one company that did this - can’t for the life of me remember who though.


#8

Based on my experience with FE International, if you’re considering selling, I’d at least talk to them. They definitely earned my trust, and there’s no obligation, but I bet they’d have some insights about red flags to look out for.

I have heard that this is increasingly happening as people are looking for bargains. i.e. If you’re not shopping it around and they give you a big enough number to consider that’s likely below what they’d pay in a bidding scenario, they get a good deal. Whereas otherwise, healthy SaaS businesses aren’t going for cheap in general these days.

I’d certainly be cautious, though, especially if three came out of nowhere in a short period of time.


#9

@garrettdimon thanks for the recommendation. At this point selling isn’t really an option but I figure it can’t hurt to hear people out. 100% agree any number they come with is just a starting point.


#10

I get approached by investors and other companies in the same space regularly. The first few times I got approached I entertained them, but I think I’ll be in a much better position to sell 3-5 years from now, so I just started to ignore these emails. I also realized I was giving them too much information for no good reason. They would ask about my business model, my target audience, how many clients we had, etc. For some reason I felt like I should answer their questions when talking on the phone. Rookie mistake.


#11

You make a great point about sharing too much information for no good reason. For now at quick ‘thanks but no’ will be my go to.