Who has bought a software business? Would you do it again?

June 18, 2025

by a searcher in St. Louis, MO, USA

I've been in tech sales past 10+ years, living in Silicon Valley and now back in the midwest. I was thinking about acquiring the "old, boring" type of business but found a software business for sale and considering sending an LOI. Before I proceed too far, I'd love to hear from anyone who's gone down this path before. How was it? Would you do it again?

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Reply by an intermediary
from University of Tennessee in Denver, CO, USA

Watch out for TAM. Small markets can be hard - there are a lot of zombie SaaS companies that overcomplicated their cap table early on without understanding how limited their addressable market was. These companies often land at 1-2m of revenue, probably profitable, but very hard to figure out where to take them. You should be looking closely at MRR, growth rate, net and gross retention, and LTV to CAC. Make sure you are understanding those metrics from the SaaS perspective.

Reply by an investor
from Albion College in New York, NY, USA

Bought a small SAAS company with nearly 100% client retention...if the value prop has been demonstrated and real then can be very attractive at the right price

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