Who buys a small SaaS business?
Several kinds of buyer look at software businesses of this size. They pay in different ways and want different things after the sale. Choose the outcome first, then the buyer.
Contents1.1Who are the likely buyers?1 / 5
§ 1.1
Who are the likely buyers?Five types, two ways to reach them.
For a SaaS business at $5k–$20k in monthly recurring revenue, the usual buyers are individual buyers, software holding companies, strategic buyers and long-term owners such as Playbook Media. Private equity funds are less common at this size. Marketplaces and brokers help you reach these buyers; they do not buy.
- Individual buyers often want to run the business themselves.
- Holding companies and long-term owners keep the business as a separate product.
- Strategic buyers may merge the product into their own.
§ 1.2
Buyer types compared.Typical patterns, not rules.
Each buyer is different. Use this table to decide which questions to ask, then check the answers with each buyer.
| Individual buyer | Holding company | Strategic buyer | Playbook Media | |
|---|---|---|---|---|
| Who they are | A person who wants to own and run a software business. | A company that owns several software businesses. | A company that sells a related product. | A company that builds and acquires software businesses to own for the long term. |
| What they want | A business they can run, often with their own time. | Steady cash and a product their team can operate. | Customers, technology or people for their own product. | A useful product to understand, improve and keep. |
| After the sale | The buyer often becomes the operator. | Often shared services, with the product kept separate. | The product may merge into theirs or close. | The product keeps its brand and its customers. |
| Time horizon | Varies with the buyer’s plans. | Often long, but ask how they are funded. | Long for the parts they keep. | Long term. We do not buy to resell. |
| Questions to ask | How will they fund the price? Have they run software before? | What do they change in the first year? | What happens to the product and its customers? | We have reviewed businesses and made offers, but none has completed. Ask how we will run the first one. |
§ 1.3
Choose by the outcome.Three common goals.
- Goal 1
The highest price
Reach many buyers through a broker or a marketplace, and compare offers by what you receive, not by the headline.
- Goal 2
Speed and privacy
Talk to a few direct buyers who can decide for themselves. You give up some price discovery for a simpler process.
- Goal 3
Continuity for customers
Choose a buyer who plans to keep the product running and can show how. Ask about the first year in detail.
§ 1.4
Questions to ask any buyer.Before you share detailed records.
About the buyer
- Who makes the final decision?
- How is the purchase funded?
- What have you bought before, and what happened to it?
About the product
- What do you plan to change in the first year?
- What happens to customers, prices and support?
- What role do you want me to play, and for how long?
§ 1.5
Founder questions.Short answers.
Do private equity funds buy SaaS businesses this small?
Rarely as a standalone purchase. Some buy small products to add to a larger business they already own.
Is a marketplace a buyer?
No. A marketplace lists your business so that buyers can find it. The buyer is still one of the types above.
Where does Playbook Media fit?
We are a direct buyer that plans to own each business for the long term and to improve it with care. Our search profile is $5k–$20k in monthly recurring revenue and three to eight years of history.
End of guide 1