Founders' hacks for successful acquisitions

On saas.unbound podcast we’ve talked with quite a few founders who went through an acquisition process. Some stories were good and some, well, we’ll call them experiences. So, we thought it’d be great to share some hacks for successful acquisitions, approaching potential buyers of your SaaS company, as well as things that founders tend to neglect or avoid up until deep into the due diligence process putting the entire deal at risk.??

Tim Schumacher - saas.group:?

“I wouldn't say there's this one hack. Like with everything else in business,? you do a decent preparation. I think it's good to just have your basic numbers ready just that there's a good appearance of your overall business. Then just do a few conversations without immediately offering the business for sale.?

Have a few conversations with people who are acquirers to fill out what they want and just be like, Hey, I want to have an open conversation.

And then regroup and form your mind and, so to say, have a product market fit for an acquisition. If the product, in this case the company doesn't fit the market, in this case, the acquirers, then there's no deal.

Approach an acquisition as you would approach product market fit, talk to a few people before you make your offering, and then go to market. Instead of going to some broker and letting that person figure everything out because that usually doesn’t work.”

Maciej Zawadzinski - PIWIK PRO:?

“I think that the first and very most important thing is that you should think,? about your company in the long term. If you would like to own assets like that, probably the buyer as well. But if you don't believe in this business and you want to just sell it,? then probably the same vibe will be after looking at it closer by the potential buyers.?

The second is to build relationships with people because they may help you when you exit, they might provide a valuable intro or they may even buy your business.?

And third, make sure when you are discussing with potential buyers that they can secure the money.

Even though most of the deals have some kind of leverage with loans to have the leverage, make sure they have another backup? Make sure they have capital to finance the transaction because it would be a shame if they back out at the last minute because they didn't get the financing.”

Peter Leonard - MyWorks Software:?

“One of the big reasons that we approached joining the saas.group family was taking a bit of stress off the table for me and having more resources available as we make decisions in the best way.?

So before that, it was quite stressful and lonely sometimes knowing that you're the one making the decision, even if it’s a hard one.? And with saas.group it’s a really good balance of having more resources and people that want to help with advice or decisions or strategy and activities going forward while also being there as a partner.

I think it was a comfortable shift from being a solo founder to becoming a CEO and focusing on areas I love the most. It wasn't anything that I wasn't prepared for and any changes were welcome because it helped take stress and some activities off my plate.

So my hack is to find the right founder-acquirer fit to not be sucked into a corporate structure where you then are just another report chain.”

JP Werlin - Pipeline CRM:

"I think for me the rollercoaster ride of that process was that evolution of what it's like to actually sell the asset.?

There were days we would wake up and think, it's done, the deal's over because we forgot about this part in our financials, or what happened in 2018, or whatever.?

And that happened, I don't know, three or four times during the process. And the process with saas.group was relatively dreamlike, like not very shrewd buyers, very smart, intelligent folks.

But you just wanna make sure everything's in the best light, and it's not always the case. And I think just being transparent and honest gets you so much further.

Point out your mistakes. Don't let them be discovered. I made a? very concerted effort with Nick to figure out what are the gotchas, and what are the things that if we discovered as buyers would make us walk away. We didn't want that to happen during our process.

So I did everything we could to get everything out on the table especially the bad stuff first.”

Nick Bertolino - Pipeline CRM:

"If there was one piece of advice for going through an M&A process that I could tell my younger self five years ago it would be to get way more organized.?

And it's not that we weren't organized, but having every single contract, not just a customer contract, every contract with a vendor, every contract with a customer, every employee agreement,? having all of those and making sure that every single contract is there.?

Make sure that all that paperwork is organized in a Dropbox or a Google Drive or in a better way. If we did that, it would've saved probably several days of work. But it's just not something that you think about. A lot of SaaS founders are sloppy, about it, and we have encountered a little hiccup here and a little hiccup there, as well.

And some of these things could be pretty risky for the acquirer. If you worked with somebody, and they're no longer here, but you never had their employment agreement signed. You're exposed to potentially having a conflict. And those are the kinds of things that can blow up a deal.

The same thing could happen with some sort of vendor. You built some features and you used a third party. Where's the contract? Is it signed? What does it say about IP? Those are the kinds of things that can blow up a deal.”

There are a lot of aspects to the SaaS acquisition but as Tobias Schlottke points out, it’s initially an honest conversation and not something to be afraid of. Coming to the process prepared and ready to be transparent about the situation in the company is key. That way you’ll be able to mitigate risks, build strong relationships with your acquirers, and truly establish a partnership where you’ll tackle the challenges together to achieve the best results.?

saas.group offers founders the exit they deserve, providing financial freedom for their next ventures. The company’s commitment to innovation and community growth is reflected in its diverse range of innovative digital products.

If you want to be featured on saas.unbound podcast, do a Live AMA with us, or get some additional information, please contact Anna Nadeina, Head of Growth, at [email protected].

For any M&A questions or interest, reach out to Dirk Sahlmer, Head of Origination, at [email protected].