What Business Owners Need to Know About SaaS Mergers and Acquisitions

In today’s digital-first economy, Software-as-a-Service (SaaS) companies are at the center of an increasingly active mergers and acquisitions (M&A) market. For founders and owners, understanding how these deals happen—and what drives premium valuations—can mean the difference between an average exit and a truly life-changing one.

Whether you’re a bootstrapped founder considering a sale for the first time or a seasoned entrepreneur evaluating your options, this article offers a clear, no-nonsense overview of the SaaS M&A landscape.

Why SaaS Businesses Are in High Demand

Recurring revenue, high gross margins, and scalable business models make SaaS companies attractive targets for a diverse range of buyers, including private equity firms, strategic acquirers, and individual investors seeking to acquire and operate small businesses.

Buyers are especially drawn to SaaS companies that meet the following criteria:

• Annual recurring revenue (ARR) of $2M–$10M

• Low customer churn (<10% annually)

• Owner-independent operations

• Strong profit margins or a clear path to profitability

If your business checks most of these boxes, you’re already on the radar of buyers searching for quality acquisition opportunities.

The Power of a Competitive Sales Process

One of the most common mistakes owners make is assuming that a single interested buyer represents the best—or only—option. In reality, the best outcomes almost always come from a competitive process that attracts multiple offers.

Creating buyer competition does more than push up the price. It also improves deal terms, shortens the timeline to close, and gives you the leverage to negotiate for what matters most—whether that’s all cash at close, limited post-sale obligations, or strong protections for your team.

Working with an experienced advisor who specializes in SaaS mergers and acquisitions ensures your company is positioned correctly, marketed to the right buyers, and sold on terms that reflect its true value.

What Buyers Are Looking For

When buyers evaluate a SaaS business, they’re not just looking at revenue. They want to understand how the business operates and how easily it can be transitioned to new ownership. Here are some of the questions they’ll ask:

• Is revenue concentrated in a few large customers?

• Are contracts long-term and enforceable?

• How reliant is the business on the founder or a few key employees?

• Are systems and processes well-documented?

• Is the codebase well-maintained and scalable?

Answering these questions with clarity and confidence helps reduce perceived risk—and increases the likelihood of a clean, high-value exit.

Timing Matters

Some founders wait too long to sell their businesses. Burnout, stagnating growth, or declining industry dynamics can all erode a business's value over time. The best time to sell is when your business is growing, but you’ve hit a point where continuing to scale alone feels exhausting or uncertain.

Buyers pay a premium when they see future upside they can unlock, and they’re willing to pay more when they know the seller isn’t desperate.

The Bottom Line

SaaS mergers and acquisitions are about much more than just finding a buyer. It’s about finding the right buyer, creating real competition, and exiting on your terms. If you’re considering selling your SaaS business in the next 6–18 months, the time to start preparing is now.

At David Jacobs Business Broker, we specialize in helping SaaS founders receive multiple, above-market offers—without charging a retainer. Our proven process has helped software companies achieve clean exits with confidence.

If you're exploring your exit options, take the first step and learn what your business might be worth in today’s active M&A market.