I completed 2 deals this year. I have been a SaaS entrepreneur before, so I was inclined to take on new deals in the Marketing SaaS space only. I was open to adjacent spaces such as Sales SaaS or Operational / Infrastructure SaaS, but all B2B SaaS deals only. I was also looking for < $500K in ARR businesses.


My thesis is that most of the $500K ARR businesses are typically not focused on ARR growth with marketing spend, but tend to grow via word of mouth. Having sold a company before and been part of one going public, I have some expertise in tech + digital marketing (especially social) which I can leverage to drive growth.


1. Having a super narrow focus helps. Given I know enough about the space and the challenges faced by entrepreneurs, their mindset and their hopes & fears. I got both deals done in less than 3 months from start to finish. Both were inbound. While this may not work for everyone, I would highly encourage you to consider being specific about what you will buy and why. If you are clear about what value you will add and the thesis around your acquisitions, it helps to clarify and weed out bad inbound deals.


Lesson - I know a lot of other searchers I met said "I am open to any profitable deal I get. That's great, but I have seen every one of those folks take 1-2 years to even get to a deal".


2. The biggest driver of deals was inbound traffic - thanks to my writing (SubStack newsletter) - which grew organically to now over 2000+ SaaS Small and Mid Sized Operators. I would encourage you to create relevant content - (thought leadership is an over used and abused term BTW), that can help your prospective target - Owner / Operators who want to sell to you. Give them tips on how they can overcome the challenges, with some examples. I only wrote one newsletter post every week, and they were "my thoughts" - not very structured or very insightful to me, but turns out they are to my audience.


Lesson - inbound deal flow has much less (not zero, but much less) competition than cold calling outbound deals.


3. Be very clear about multiples in your space. For e.g., in the micro-PE-fund space, for small revenue in SaaS, my multiples were on revenue not on EBIT or earnings. Micro revenue has lower multiples - less than small, mid-sized companies that regular PE funds are willing to offer. That was a big shock to many of the owner / operators who were reading "PE fund buys XYZ SaaS company or PE fund takes XYZ public company at X multiple" in the news. You will not be able to get through to some founders and I wasted a lot of time trying to "convince" owners their numbers were off. But they did not want to budge.

Lesson - move on quickly. Even if a company is "good", but the founder is unwilling to accept lower multiples the "deal" does not work out.