SaaS Exit Strategies: How to Maximize Your Exit Outcomes

For many SaaS owners, an “exit strategy” isn’t about retirement; it’s about finding the right partner to grow their company.

As Aaron Solganick, CEO of Solganick & Co., put it in a recent interview, most SaaS founders aren’t looking to “exit and buy a home in the Bahamas.” They’re looking for the best mechanism to raise capital and scale their business, whether through strategic acquisition, private equity investment, or another growth transaction.

With this type of exit strategy, you lose majority control but shed back-office burdens like accounting and HR to focus on what you do best — whether that’s engineering, sales, or marketing. You might become the CEO, a senior vice president, or join the executive committee, focusing on your niche while the buyer provides the capital and expertise to scale. And as a result of finding the right partner, your business grows. This can lead to a second exit when you receive a much more substantial payout based on your business’s new (and much higher) ARR multiple.

In this post, we look at:

• SaaS deal structures and the strategies behind them
• How to maximize your exit outcomes

Understanding SaaS Deal Structures and the Strategies Behind Them

Most SaaS transactions include some combination of cash at close, rollover equity, and earnouts. The specific mix depends on the buyer type and your overall exit goals.

Cash at Close: Tax Considerations

Cash at close is the immediate liquidity you receive when the deal closes. The amount varies significantly based on buyer type and deal structure.

The amount of cash at close varies based on buyer expectations. Individual buyers in smaller deals may offer more cash upfront (if they can secure financing), especially when they want a clean break with no ongoing involvement. PE firms typically offer less cash upfront because they want you invested in the outcome — skin in the game ensures smooth transition and continued growth.

But more cash at close isn’t necessarily ideal. Solganick emphasized that owners want to consider the tax implications of cash at close. All-cash deals create a significant tax burden that can dramatically reduce your actual take-home. This is why many sellers prefer mixed structures, even when they could get all cash; working with tax specialists to optimize the deal structure can significantly increase your after-tax proceeds.

Rollover Equity: The “Second Bite”

Rollover equity means you reinvest part of your proceeds into the combined company post-transaction.

With strategic buyers (larger, complementary software companies), Solganick often sees a typical rollover of 10–20% of transaction proceeds, or roughly 10% of the combined business. Your product and customers plug into their existing infrastructure, their salespeople, customer base, and distribution channels. As Solganick explained, “If you’re being acquired by Microsoft or Oracle or somebody really big, they’re going to have an army of salespeople. You’re going to plug your products into what they’re doing and they can cross-sell to their clients.”

Because of that, a $10–20M company can reach $200M+ through their distribution.

With PE buyers, rollover amounts vary based on where they are in their acquisition cycle. If you’re the first acquisition, more equity is available. If you’re the 20th, less is available because they’ve already given equity to other sellers.

PE firms are in the business of performing multiple arbitrage — buying at 4–6x ARR, scaling the business to $100M+, then selling at 12x+ multiples.

So while higher rollover equity means lower cash at close, it can have more upside potential. That “second bite” opportunity is significant. PE firms typically hold software companies for 3–5 years, during which they work to increase both revenue and the valuation multiple.

With that second bite of the apple, Solganick said that “sellers can often receive equal to or more than their initial sale price on the second transaction. Let’s say you sell for $15M cash plus 20% rollover equity. Five years later, the company sells for $200M. Your 20% stake equals $40M or nearly three times what you initially received at close.

Earnouts: Bridging the Gap

Earnouts are future payments based on hitting specific performance metrics. In our interview, Solganick shared that, “Earnouts are common in smaller deals ($5M-$30M ARR) and typically represent 20-30% of total deal value.”

From the buyer’s perspective, earnouts serve several purposes:

• Ensure stability and smooth integration
• Verify that customers and revenue stay post-transaction
• Reduce risk on forward projections
• Bridge valuation gaps when buyer and seller disagree on current value

The question then isn’t so much about whether or not your deal will have an earnout, but whether the earnout structure and agreement is fair.

Earnouts are typically based on customer retention, revenue milestones, or ARR performance over 2-3 years, with payments every 12 months.

Solganick advises that you want to “avoid “all or nothing” structures.” If you hit 90% of your target, you should get partial credit, not zero. Solganick’s team negotiates terms like these carefully. “The structure of the earnout — including metrics, reporting, and payment mechanisms — is heavily negotiated, often with the help of bankers and attorneys. It’s negotiated to avoid an ‘all or nothing’ situation if targets are narrowly missed.”

Through these negotiations, M&A advisors can ensure that the buyer can’t undermine your ability to hit targets and that measurement methodology (e.g., revenue recognition according to GAAP), reporting mechanisms (who calculates, how often), and dispute resolution processes are clearly defined.

To give us an idea of the kind of earnouts he pushes for, Solganick shared an example of a fair and competitive earnout that he structured for a client. “We had a client with long-term contracts coming up for renewal right after the sale. The PE firm calculated the risk of non-renewal and offered less cash upfront with an earnout tied to those renewals. We negotiated a structure where the seller got 75% credit for renewals happening within 90 days of the target date, protecting them from factors outside their control.”

Deal Timing and Certainty

Your exit timeline is part of your overall strategy. Some owners can take 12-18 months to find the perfect buyer; others need to close within 6 months due to personal circumstances, partnership changes, or market timing considerations.

An M&A advisor helps by targeting buyer types that match your timeline requirements and ensuring buyers can actually execute.

Not all buyers move at the same speed:

• PE firms and strategic buyers generally close more quickly. They can typically close in 45-90 days post-LOI because they have committed capital and experienced deal teams. Plus, PE firms know how to execute transactions efficiently. Strategic buyers can move quickly, too, as they’re investing from a balance sheet (i.e., have the funds readily available) and have in-depth industry knowledge that lets them move through due diligence quickly.

• Search funds and individual investors face more challenges in the SaaS space. While they may offer better cultural fit and offer more stewardship, they need to raise the capital to make the acquisition, which can be a lengthy and fraught process. As Solganick noted, “There are a lot of search funds out there, but that doesn’t mean they’re getting deals done as often.”

Your advisor helps you understand these trade-offs. If timeline is critical, they’ll focus on PE firms and strategics who can move quickly. If you have more flexibility, they can include search funds and individual buyers who might offer better cultural fit or stewardship but require longer timelines.

How to Execute the Best SaaS Exit Strategy with the Right M&A Advisor

Understanding these deal components — cash, rollover equity, and earnouts — is the first step. But knowing the mechanics doesn’t mean you can maximize your outcomes on your own. Without an experienced advisor, you don’t have the buyer network to create competitive tension, you can’t objectively evaluate your own business, and you’ll spend 20-30 hours per week managing the process instead of running your business.

The difference between a good exit and a great exit comes down to having an experienced M&A advisor. Below, we look at 5 key ways a SaaS M&A advisor can help you achieve your ideal exit.

1. They Conduct an Accurate Valuation of Your SaaS Company

You might know your ARR, EBITDA, and key metrics, but translating that into what buyers will actually pay requires deep market knowledge.

Solganick explained: “If a company gives me their ARR, gross margin, and EBITDA, I can give them a rough estimate. But you want a specific and accurate multiple. The more KPIs and the more financial data I have to work with, the more accurate your valuation will be.”

In 2025, Solganick has been seeing multiples ranging from “3x-5x ARR for smaller SaaS companies to 7x-12x for mid to large companies that are showing consistent growth.” Whether your company is valued at 3x or 5x ARR determines whether selling now makes sense.

Advisors bring data from comparable companies and recent transactions, an understanding of what different buyer types will pay, and insight into how to position your metrics for maximum impact.

Accurate valuation sets realistic expectations before you go to market and helps you decide if now is the right time to sell or if you need 6-12 months of preparation.

2. They Create Competitive Bidding Environments

Most owners receive one unsolicited offer with no context about whether it’s good or what better terms might be available.

Here’s how Solganick & Co. transformed one recent deal:

• Marketed the business to ~300 companies
• 80 signed NDAs (showing serious interest)
• 16 submitted Indications of Interest (IOIs)
• Narrowed to 8 viable buyers who were good strategic fits

The seller went from one offer to choosing among eight qualified options.

Solganick’s typical process involves targeting buyers that are roughly “50% from personal relationships and 50% from research” — companies that recently received funding, publicly traded companies, and PE firms specializing in software. They focus on strategic fit: how your company could serve as a product add-on, help geographic reach, or align customer bases with prospective buyers.

This process takes 3-4 months of marketing and narrowing the funnel to the strongest buyers.

Multiple competing offers drive up your final sale price, create better deal terms (more favorable earnout structures, higher cash at close), and provide more options for finding the right cultural and strategic fit.

3. They Position Your Business for Different Buyer Types

Different buyers care about different things. Strategic buyers focus on customer base overlap, geographic expansion possibilities, and technology integration potential. Financial buyers (PE firms) focus on cash flow predictability, growth efficiency, operational improvement opportunities, and add-on acquisition potential.

An experienced advisor knows how to frame your business for maximum appeal to each buyer type. If your business has slightly higher churn in certain customer segments, an advisor might reframe this by showing how your overall LTV:CAC ratio remains strong due to higher-value customer segments, or how recent product improvements are already reducing churn in newer cohorts.

An experienced advisor also helps you evaluate buyer types objectively. As Solganick noted, “Many sellers initially rule out certain buyer types — ‘too big,’ ‘too corporate,’ ‘PE will change everything’ — but end up selling to the buyer they initially dismissed. Why? Best offer plus better understanding after conversations.”

You can learn more about finding buyers and buyer types in our article: How to Find a Buyer for Your Business

4. They Keep a Cool Head During Negotiations

This is likely the biggest financial transaction of your life, and you’re emotionally attached to your company. Advisors provide the detachment and experience needed to navigate complex negotiations objectively.

Evaluating complex deal structures

Buyers will present offers with different structures that can be challenging to compare. One might offer a larger upfront cash payout, while another offers a larger payout spread over several years, contingent on hitting performance milestones. A third might emphasize rollover equity with significant upside potential.

An experienced advisor helps you evaluate which structure actually serves your exit goals best. They work with your tax advisors to minimize tax burden, assess whether earnout metrics are achievable, and determine how much equity you should roll over based on your confidence in the buyer.

Knowing when to push, stand firm, or compromise

Advisors know from experience where you have leverage and where you don’t. As Solganick explained, “An experienced advisor can help you evaluate these offers objectively, leveraging their knowledge of your business and the market landscape to determine which deal structure is best for you. They also know where to push for more, where to stand firm, and where to compromise, ensuring you get the best possible outcome.”

This expertise extends to earnout negotiations (knowing what’s fair and achievable), rollover equity discussions (understanding typical ranges for your deal size), and keeping multiple buyers engaged during due diligence so no single buyer gains too much leverage.

Spotting red flags through the process

M&A advisors often describe the M&A process like dating. First meetings are always good because everyone’s on their best behavior. Later meetings reveal true personality and fit. Advisors help you spot red flags like overreaching questions, unreasonable demands, or unprofessional behavior that you might rationalize away.

5. They Manage the Process (So You Can Focus on Your Business)

Without an advisor, you’ll spend a significant amount of time managing buyer outreach, calls, and due diligence requests while struggling to maintain business performance.

Advisors streamline this by conducting first-round qualifications without you present (eliminating weak buyers), bringing you in for 10–20 high-quality calls instead of 200-300 inquiries, managing document requests and data room organization, and coordinating meetings to keep the process moving.

As Solganick explained, “The fastest we’ve closed deals is about four months, and the longest is around 12 months. Our total process averages are ~6 months from engagement to close, 3-4 months of marketing and buyer engagement, then 45-90 days post-LOI for due diligence and closing.”

You stay focused on maintaining business performance (critical for valuation) while the advisor drives the transaction forward.

How to Find the Right M&A Advisor for Your SaaS Exit

Throughout this piece, we’ve discussed how advisors create competitive bidding environments, negotiate fair earnouts, and help you evaluate cultural fit. But not all advisors deliver these outcomes equally well.

Specifically, you want:

• Recent, relevant deal experience: Market conditions in SaaS change quickly — what buyers valued last year may differ from what they prioritize today. Look for advisors who have recently closed SaaS transactions, have experience with businesses of your size, and understand SaaS-specific metrics and valuation methods.

• Proven down-funnel success: Look for advisors with a track record of moving buyers through the process — from NDAs to Indications of Interest (IOIs) to submitted Letters of Intent (LOIs) — and demonstrated ability to generate competitive bidding with multiple qualified buyers at the table.

• Professional reputation: You’ll work closely with your advisor for 6-12 months through a complex, high-stakes process. Look for responsiveness and communication effectiveness, ability to manage complex negotiations without losing deals, and a track record of happy clients who would work with them again.

At Axial, we’ve developed a data-driven approach to matching SaaS business owners with M&A advisors who have relevant experience and proven track records in the software industry.

We start by pairing you with an Exit Consultant who gets to know your business and your exit goals. Your Exit Consultant will leverage Axial’s network of 3,000+ M&A advisors to create a shortlist of 3–5 candidates with:

• Recent, relevant deal experience in the SaaS industry
• Track record of advancing potential buyers from initial interest to submitted bids
• Strong down-funnel success, including the number of bids generated and successful sales completed within the Axial network
• Positive feedback on professionalism, reputation, and responsiveness

We provide detailed insights about each candidate to help you evaluate your options and prepare for advisor interviews. As you narrow down your options, we can help you evaluate the M&A advisors you’re considering and give you detailed and specific questions to ask each advisor.

If you’re ready to learn more about selling your SaaS business, schedule your free exit consultation today.