Sell My SaaS Business: A Guide to Achieving Your Ideal Exit

Selling your SaaS business is likely to be the biggest and most complex financial transaction of your life. If the sale isn’t navigated correctly, you can run into valuation misalignments, where you end up taking a lower offer or agreeing to a deal structure that isn’t optimal, such as lower cash up front and hard-to-achieve earnouts. Or the deal may simply fall through if the buyer doesn’t have the finances to make the acquisition, or you and the buyer can’t agree on terms.

You can increase the chances of achieving your ideal exit by working with an M&A advisor who has relevant experience in the SaaS industry.

M&A advisors help in key ways:

• They verify whether or not you’re ready to go to market. Often, owners think they’re ready to sell before they’ve properly prepared their business, or they believe their business is valued at a certain multiple when it’s actually lower than they expected. A good advisor will assess your financial records, key metrics, and operational readiness to determine if now is the right time to go to market or if you need 6–12 months of preparation to maximize your valuation — helping you meet your exit goals.

• They value your SaaS business accurately and within the context of selling. This involves not just having the right data points (like data from previously closed deals to inform their analyses), but it also means knowing how to value your business as a buyer would. Owners often see value in a different way than potential acquirers, focusing on features they built rather than the metrics that drive purchase decisions.

• They have access to a large network of vetted buyers who have historically acquired businesses like yours or are actively looking for one. Advisors maintain relationships with diverse buyer types, each with different motivations and acquisition criteria. This includes strategic buyers (larger SaaS companies or tech firms seeking to expand their product offerings or market reach), private equity firms (focused on profitable, scalable software businesses), independent sponsors (individual investors backed by institutional capital), and corporate development teams from Fortune 500 companies looking to acquire innovative technology solutions.

• They keep a clear head during negotiations. Advisors can evaluate deal structures, earnout provisions, and buyer terms without the emotional attachment that might cloud your judgment, ensuring you get the best possible outcome.

Because of the above, M&A advisors have been shown to bring in higher sale prices and better overall exit outcomes — such as finding a good steward for a business or negotiating a deal that gives you the exit timeline and equity that you’re looking for.

Below, we take a deep dive into:

How M&A Advisors Can Achieve Your Ideal Exit

• Accurately Value Your SaaS Business
• Creating Competitive Bidding Environments Increases Leverage
• Experienced Advisors Know How to Position Your SaaS Metrics to Maximize Perceived Value
• Professional Negotiation and Deal Structuring Expertise

How Axial Connects SaaS Owners with the Right Advisors

• Our Data-Driven Approach to Advisor Matching
• How We Evaluate Advisors Based on Relevant Experience, Down-Funnel Success & Professionalism
• The Curated Shortlist Process

We wrote this piece with the help of Aaron Solganick, CEO of Solganick & Co., a data-driven investment bank focused exclusively on software and IT service companies. Solganick is one of the advisors within our network that can help you sell your SaaS business. At Axial, we have a network of over 3,000 advisors, along with information on their recent deals. We’ve had several types of SaaS companies contact us to find an advisor for them, including companies in HR tech, GovTech, enterprise software, data analytics, and contact management platforms. These businesses ranged from $3M to $16M in revenue, each with unique positioning challenges and buyer requirements.

If you’re ready to sell your SaaS business, schedule your free exit consultation today.

How M&A Advisors Can Achieve Your Ideal Exit

Accurately Value Your SaaS Business

Getting an accurate valuation is crucial because it sets expectations for both you and potential buyers, helping you determine whether current market conditions align with your exit goals. It also prevents you from accepting offers that undervalue your business.

The simplest way to understand the value of your business is to think in terms of a multiple of your annual recurring revenue (ARR), but arriving at this multiple requires in-depth analysis.

As Aaron Solganick, CEO of Solganick & Co., a data-driven investment bank focused exclusively on software and IT service companies, told us in a recent interview, “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.”

For example, 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.” That’s a wide multiple range, and whether your company is going for 3x or 5x its ARR will likely impact whether or not you want to sell your business.

To get your multiple, M&A advisors will analyze your KPIs and financial data within the context of bigger market conditions to arrive at an accurate multiple.

The most important KPIs include:

• Annual recurring revenue (ARR) and monthly recurring revenue (MRR)
• Customer churn rate
• Customer acquisition costs
• Predictable revenue growth
• Gross margins
• LTV (lifetime value) to CAC (customer acquisition cost) ratio

Here’s why you want to work with an M&A advisor with recent and relevant experience in selling SaaS companies:

• They can use data from comparable companies, which helps inform their valuation.
• They have a good understanding of what buyers will actually pay (and how they’ll structure the deal).

At the end of the day, your SaaS company is worth what someone is willing to pay for it.

When arriving at your multiple, advisors will also consider the Rule of 40, which states that if a SaaS company’s revenue growth rate plus its EBITDA margin equals or exceeds 40%, it will typically demand a market or above-market valuation multiple.

Note: Things you cannot necessarily change, such as industry and market conditions, also play a key role in your valuation. Currently, companies in high-growth areas like AI, data analytics, advanced applications, edge computing, and cybersecurity are much more likely to receive higher multiples. A key role of an advisor is to help you understand your business value so you can decide if selling is the right decision.

Creating Competitive Bidding Environments Increases Leverage

A key way that an M&A advisor can increase the final sale price (or overall exit outcomes) of your business is by creating a competitive bidding environment. Often, SaaS business owners will reach out to firms like Solganick & Co. because they received an offer from a buyer. But they don’t know if it’s a good offer or what other kinds of offers they could potentially get.

At Solganick & Co., Aaron and his team tend to focus on creating a competitive bidding environment by targeting diverse buyers. This includes researching who is actively buying companies, who has recently received funding (including publicly traded companies), and private equity firms that specialize in software. “About 50% of the buyers we target are ones we have personal relationships with, and the rest are buyers that we’ve found through our research.”

They focus on strategy and fit, examining how your company could potentially serve as a product add-on for a buyer, help its geographic reach, or if your company’s customer base aligns with a prospective buyer.

Let’s look at the numbers associated with creating a competitive bidding environment. In a recent deal that Solganick & Co. closed, they had marketed the business to around 300 companies. Out of those 300 companies, 80 signed NDAs, indicating their interest in learning more about the business. Out of those 80 NDAs, 16 buyers submitted an Indication of Interest (IOI), which meant they were interested in potentially making an offer. From that list of 16, Solganick and his team narrowed it down to 8 viable buyers — ones who were a good fit. Now, their client has 8 buyers to work with and negotiate with before executing a Letter of Intent and working towards closing the deal. Before working with an M&A advisor, they only had one offer.

Rather than negotiating with a single interested buyer, advisors can simultaneously engage multiple qualified buyers, driving up your final sale price through competition.

Experienced Advisors Know How to Position Your SaaS Metrics to Maximize Perceived Value

We discussed the importance of accurately valuing your company and marketing your business to a large number of qualified buyers to create a competitive advantage. But it isn’t enough to simply reach out to a long list of buyers. Advisors can help your business stand out by marketing your business in a way that helps buyers truly understand its value.

As we discussed above, SaaS businesses have unique characteristics that require specialized knowledge to market effectively. Unlike traditional businesses that might be evaluated primarily on revenue and profit, SaaS companies are valued based on complex metrics, such as:

• Annual Recurring Revenue (ARR)
• Customer acquisition cost (CAC)
• Lifetime value (LTV)
• Churn rates

An experienced SaaS advisor understands how to present these metrics in the most favorable light while maintaining credibility with sophisticated buyers. The value of these metrics does not exist in a vacuum — they exist within the context of what type of buyer you’re targeting and what they’re looking for in an acquisition.

For example:

• Strategic buyers may be most interested in your customer base overlap, geographic expansion opportunities, or potential for technology integration. An advisor would emphasize metrics that demonstrate market penetration and scalability.
• Financial buyers typically focus on cash flow predictability and growth efficiency. For these buyers, advisors would highlight strong LTV:CAC ratios, low churn rates, and consistent revenue growth patterns.
• Private equity firms often look for operational improvements and add-on acquisition opportunities. Advisors might emphasize your management team strength, market position, and potential for bolt-on acquisitions. (Learn more about selling to a private equity firm here.)

The key takeaway here is that different buyers value and offer different things. Here are two examples from SaaS companies that have reached out to us at Axial:

• A form-building tool that serves enterprise clients like Visa, government agencies, and consulting firms such as Accenture and Deloitte, contacted us about selling their business. Their company would likely appeal to strategic buyers seeking to expand their enterprise software offerings.
• A contact-finding SaaS platform reached out to us about selling their business. They’re generating $3M in ARR, serving recruiters and sales professionals. Strategic buyers might value the customer data and integration opportunities, while private equity firms would focus on the recurring revenue predictability and scalability potential.

You can learn more about the differences between a strategic and financial buyer here.

Professional Negotiation and Deal Structuring Expertise

SaaS transactions can involve complex deal structures, including earnouts based on customer retention, revenue milestones, or product development goals. These structures can significantly impact your actual payout, but evaluating their fairness requires understanding both market norms and the specific risks involved.

An experienced advisor can negotiate protective provisions around earnouts, ensure reasonable achievement benchmarks, and structure deals to minimize your downside risk while preserving upside potential.

When you work with an M&A advisor like Aaron Solganick, they’ll understand what is driving you to sell, including whether you want to make a complete exit or maintain some equity. They’ll understand what sale price you need, what your exit timeline looks like, and what you want for your company after your exit.

All of those goals go into navigating negotiations and deal structures.

How Axial Connects SaaS Owners with the Right Advisors

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.

Our Data-Driven Approach to Advisor Matching

Rather than providing generic referrals, we analyze each advisor’s transaction history within our network to understand their specific expertise. For SaaS businesses, this means identifying advisors who understand software industry valuations, have experience with SaaS-specific due diligence requirements, and maintain relationships with buyers who actively acquire software companies.

We examine factors like the advisor’s experience with businesses of your size, their familiarity with your technology stack or market vertical, and their success rate in closing SaaS transactions at competitive valuations.

How We Evaluate Advisors Based on Relevant Experience, Down-Funnel Success, and Professionalism

Our evaluation process considers three critical factors:

• Relevant deal experience: We prioritize advisors who have successfully sold SaaS businesses similar to yours in terms of size, business model, and market. This includes analyzing the total number of relevant deals they’ve completed on Axial, with particular emphasis on transactions from the last 24 months to ensure current market knowledge.
• Down-funnel success: We track each advisor’s ability to convert buyer interest into actual offers. This includes metrics like the number of qualified bids generated per transaction, the percentage of deals that reach the LOI stage, and their success rate in closing transactions once under contract.
• Professionalism and reputation: We consider feedback from both buyers and sellers who have worked with each advisor, including responsiveness scores, communication effectiveness, and overall satisfaction ratings from previous transactions.

The Curated Shortlist Process

We start by pairing you with an Exit Consultant who understands your business and exit goals. Your consultant will leverage Axial’s network of over 2,000 M&A advisors to create a shortlist of 3-5 candidates who are specifically qualified to handle your SaaS business sale.

Each advisor on your shortlist will have demonstrated expertise in SaaS transactions, proven ability to generate competitive interest, and strong professional reputation within our network. We provide detailed insights about each candidate to help you evaluate your options and prepare for advisor interviews.

Our Exit Consultants have successfully connected SaaS owners with advisors who specialize in understanding software industry dynamics, including the shift toward private equity interest in the sector and the growing demand from strategic buyers seeking to expand their technology capabilities.

Schedule your free Exit Consultation today.

Next Steps: Prepare Your SaaS Business for Sale (6–12 Months Before Going to Market)

As a business owner, one of the most impactful things you can do to ensure a smooth exit is to prepare your business. At Axial, we surveyed M&A advisors and investment banks and asked them what could derail a deal; some of the most frequently cited reasons were unrealistic expectations from the owner and a lack of exit preparation.

Most SaaS companies benefit from 6–12 months of preparation before going to market. During that exit preparation, you can:

• Clean up financials and metrics: Owners should clean up their financials and gather key performance indicators (KPIs) 6 to 12 months before going to market. Most privately held and self-funded companies between $5 million and $50 million in revenue often have not done this and may still be using simple accounting systems like QuickBooks.
• Track key metrics: Essential metrics to track include Annual Recurring Revenue (ARR), Monthly Recurring Revenue (MRR), churn rate (customer and revenue churn), customer acquisition costs, predictable revenue growth, and strong gross margins.
• Ensure data trustworthiness: You want your financial and operating data to be uniform and trustworthy for potential acquirers, especially larger, publicly traded companies. An M&A advisor can help organize financials and create comprehensive financial models and forecasts, though they are not an accounting firm. Hiring an independent source, like an accounting firm for a sell-side Quality of Earnings (QoE) report, can add credibility to your financial data.
• Create a data room: Preparing a comprehensive and organized data room with all financial, operating, HR, IP, legal, and shareholder information helps with a faster transaction, especially during the closing stage. Buyers will be looking at troves of data and financials, and it’s best to have them easily organized and sortable.

If you’re ready to get your company accurately valued and work towards going to market, we can help you by pairing you with the right M&A advisor. Schedule your free Exit Consultation today.

FAQs

How Do I Value My SaaS Business?

SaaS businesses are typically valued using different methods than traditional companies, with a heavy emphasis on recurring revenue metrics and growth potential.

The most common valuation method for SaaS businesses uses multiples of Annual Recurring Revenue (ARR). Current market multiples typically range from 3-8x ARR, although exceptional businesses with strong growth and profitability can command higher multiples.

The specific multiple your business achieves depends on several factors:

• Company size: Larger companies generally receive higher multiples. For example, a company with $50 million or $100 million in ARR will get a higher multiple than one with $5 million or $10 million in revenue. Generally, your ARR multiple can increase by a point or two for every $20 million of ARR.
• Growth rate: Consistent year-over-year growth can significantly impact your SaaS company’s multiple.
• Profitability: While being profitable (having a positive EBITDA) is not a primary driver for SaaS companies, it’s a key metric that buyers look at, especially private equity firms. According to Aaron Solganick of Solganick & Co., “Many high-growth software companies are intentionally not profitable because they’re reinvesting heavily back into the business, particularly in R&D and growing top-line revenues.”
• Size: Larger businesses (>$10M ARR) generally receive higher multiples than smaller ones.
• Market Position: Companies with strong competitive moats or market-leading positions often achieve premium valuations.

M&A advisors will use comparable company analysis and precedent transaction analysis to better understand the value of your company within the context of the current market.

You can learn more about valuation in our posts on:

• How to Value a Company for Sale
• Business Valuation Misconceptions
• How to Price a Business for Sale

What Are the Key Metrics for Valuing a SaaS Business?

The more KPIs and financial data you have at your disposal, the more accurate your valuation will reflect your SaaS company’s value.

• Annual recurring revenue (ARR): The total recurring revenue your business generates annually from subscriptions.
• Monthly recurring revenue (MRR): The monthly equivalent of ARR, useful for tracking short-term growth trends.
• Customer churn rate: Monthly churn rates below 2% for B2B SaaS or annual churn below 10% demonstrate strong customer satisfaction and predictable revenue.
• Customer acquisition costs: A lifetime value to customer acquisition cost ratio above 3:1 shows efficient customer acquisition and strong unit economics.
• Predictable revenue growth: Consistent, predictable growth patterns are more valuable than erratic high-growth periods followed by slowdowns.
• Strong gross margins: SaaS businesses should typically maintain gross margins above 75%, with best-in-class companies exceeding 85%.

How Can I Maximize the Value of My SaaS Company?

Before engaging buyers, focus on optimizing the metrics that drive valuation:

• Reduce churn through improved onboarding, customer success programs, and product enhancements.
• Improve your LTV:CAC ratio by optimizing acquisition channels and increasing customer lifetime value.
• Streamline operations to improve gross margins and demonstrate scalability.
• Implement strong financial controls and reporting to provide buyer confidence in your metrics.
• Lower customer concentration. By diversifying your client base, you can show less risk to potential buyers.

Plus, having a thorough exit preparation and clean financials go a long way in helping maximize the value of your company. Aaron Solganick of Solganick & Co. says:

“If your company is still using simple accounting systems like QuickBooks, I’d generally recommend that you implement a more robust system that can correctly report KPIs and operating metrics. That data is key in helping a buyer see your value.”

What Is the Rule of 40?

According to Bain & Company, the Rule of 40 is a significant metric that originated in Silicon Valley. It suggests that if a SaaS company’s revenue growth rate plus its EBITDA margin equals or exceeds 40%, it will typically receive a market or above-market valuation multiple.

For example, a company might be “growing 40% year-over-year or greater” with break-even profitability, or it might have “20% growth revenues and 20% EBITDA margins.” This rule applies to ARR and earnings, helping buyers quickly assess whether a SaaS business represents good value.

Companies that exceed the Rule of 40 threshold demonstrate they can balance growth and profitability effectively, making them attractive acquisition targets.

How Do I Sell My SaaS Business?

When you want to sell your SaaS business, you’ll want to work with an M&A advisor — like Aaron Solganick of Solganick & Co. — who can better help you understand if now is the right time to sell.

If it’s the right time, you can start the M&A process, which includes:

1. Valuing your business using SaaS-specific metrics and market comparables
2. Creating marketing materials about your company, including executive summaries and detailed financial models
3. Targeting buyers with an Investment Teaser and creating a competitive bidding process among qualified acquirers
4. Evaluating buyers, disqualifying buyers who aren’t a good fit, and moving qualified candidates to the next stage of the process, which involves issuing NDAs and Confidential Information Memorandums (CIM)
5. Executing a Letter of Intent (LOI) and starting negotiations on final deal terms and structure

At Axial, we can connect you with M&A advisors who specialize in SaaS transactions and have proven track records of successfully closing software business sales. Our Exit Consultants will help you find the right advisor match for your specific business and exit goals.