BBW #003: Sourcing SaaS Deals
Find and vet a profitable SaaS business
Welcome to Week 3 of Business Buying Weekly! Last week, we discussed financing a SaaS deal.
Now, it’s time to dive into sourcing SaaS deals. I know it’s a little “cart before the horse” — but I wanted to know what you need to look for moneywise before you begin.
After all, finding a profitable SaaS business requires strategy and networking. Here's how you can find and vet the best deals.
1. Where to Find SaaS Businesses for Sale
There are several online marketplaces specifically for SaaS businesses:
Acquire: Popular for SaaS startups, searchable by revenue, growth rate, and valuation range.
Flippa: Best for smaller SaaS businesses but requires careful vetting. Business Buying Weekly subscribers can use my referral link!
Empire Flippers: Focuses on larger, established SaaS businesses.
FE International: Specializes in mid-market SaaS businesses with a good vetting process.
Start with a clear vision of the business size and growth potential you’re targeting to narrow your search.
2. Using Brokers and Networks
Some of the best deals are never listed publicly. Brokers and personal networks can lead you to pre-qualified listings or direct sales.
Join SaaS investor groups or online communities like Indie Hackers to connect with sellers.
3. Key Metrics to Watch for When Vetting SaaS Deals
Key metrics include:
MRR (Monthly Recurring Revenue)
CAC (Customer Acquisition Cost)
Churn Rate (Customer Retention Loss)
LTV (Lifetime Value)
These metrics help you identify red flags and focus on businesses with strong recurring revenue and low churn.
4. Running Your Own Outreach Campaigns
You don’t have to wait for a deal to come to you. Target smaller SaaS companies with steady growth and craft personalized messages to introduce yourself as a buyer.
5. Ask the Right Questions During Initial Contact
Key questions to ask:
What are the main customer acquisition channels?
What percentage of revenue comes from recurring payments?
How long have customers been using the product?
What are the company’s biggest challenges?
Make sure to ask about the owner’s involvement in daily operations.
For a deeper dive into sourcing SaaS deals, check out my guide at How to Source SaaS Deals.
Next week, we’ll explore evaluating SaaS business models and how to choose the right one for your portfolio.
Be patient—sourcing the right deal takes time, but a strategic approach will lead to success.
Source your SaaS deals with Flippa!
Flippa makes it easy to buy businesses — providing you with the tools and expertise to buy a company that suits you. Flippa has over 2,000 new monthly listings — with validated and verified data so you can do your due diligence. They also make it easy to negotiate and send offers. Why not give it a try?
Use my referral link to get started!