@ayan_bandyopadhyay Hey, Ayan! My team and I really could've used something like this back when we were in YC... What kinds of multiples are you guys seeing for SaaS right now?

Hi @mkrupprecht , that's the golden question! For "lifestyle" SaaS aka one that's generating cash flow and growing 0-50% per year, financial buyers are paying 1-5x on ARR or 2-7x on EBITDA. It tends to cluster on the low to medium end of the ranges, we rarely see multiples on the high end. I know those ranges are still broad but it's difficult to be more specific without knowing the financial and operational details of a company. Something as innocuous as where its employees live can add or subtract a turn from the multiple. For growth SaaS, it varies wildly as strategics are often the only viable type of buyer and they generally don't price based on multiples.

@ayan_bandyopadhyay Congratulations ! Are buyers limited in US markets ?

@aris_nakos Nope, we have buyers all over the world. Most of our sellers are based in the U.S. though.

@ayan_bandyopadhyay > Marketplaces like Flippa and Acquire are great for selling businesses under $1m, but not so great for maximizing your exit. How are you actually different from Flippa and Acquire?

Thanks @german_merlo1 ! Appreciate your support

Hi @anatasia_evans good question, so far we've seen a mix of financial and strategic buyers. Given we target companies with $1m-$10m in revenue, we see a lot of searcher funds and self-funded searchers, as well as a number of software holding companies. On the strategic side, it's largely founders at series B+ companies, but some larger ones. In fact the first deal closed through our marketplace was a strategic buyer from a Series D company.

Thanks @anatasia_evans! The buyers on our platform typically fall into one of three categories: search funds, private equity firms, and strategic buyers. Search funds are individuals backed by private capital, looking to acquire one business and grow it. Private equity firms and holding companies buy multiple businesses, usually in the same category. Strategic buyers are companies with competing or adjacent products that could get value from your company’s team, product, or customer acquisition channels.

@alex_dulub When working with Dealwise, your company remains anonymous until you decide to engage with a buyer. We handle most of the outreach, thereby eliminating the risk of employees discovering the process or diminishing leverage in future negotiations.

Thanks @intellectia_ !

Thanks @aaliya_shah!

Thanks @yasec_kowalski! And that's a good question. I have a more detailed answer in my reply to @kamil_kisielewicz but the summary is that we use a hybrid semantic and keyword search to find more potential buyers than a traditional buyers. And on the engagement side -- we use AI to personalize outreach, which is useful because the acquisition thesis varies from one buyer to another.

@kamil_kisielewicz @ayan_bandyopadhyay Thank you for your response! It's fascinating to learn about your approach to finding potential buyers using a hybrid semantic and keyword search method. Leveraging AI to personalize outreach is indeed a smart strategy, considering the diverse acquisition theses among different buyers. I'll be sure to check out your detailed answer to @kamil_kisielewicz ☺️

@gabe_villasana Dealwise specializes in SaaS startups, but we work with any promising companies.

@monax_teamazing Unlike marketplaces, at Dealwise we give you an actual human M&A advisor to guide you through the later steps of the transaction, including negotation and closing.

Thanks for the support @alberttai

Thanks for the support @heartbyte ! We're learning things all the time. When fundraising, it's generally frowned upon to intentionally bid up your valuation by shopping a term sheet around. For some reason, lots of founders who have fundraised don't realize the same applies for M&A and want to shop offers around to bid the price higher. But this can backfire. Since LOIs are non-binding some buyers treat it as a free option on acquiring the company. There's no cost to them to put in a high offer, then negotiate it down during diligence or pull out altogether.

@kamil_kisielewicz Great question! We use AI for two things that previously could not be automated: 1. Compiling a list of buyers. In order to put together a list of buyers for a business, you need to understand what the business does and then identify competitors and companies with adjacent products. You can do this manually but it's easy to miss potential acquirers. Instead, we use a semantic + keyword search to identify acquirers with human review at the end. 2. Reaching out to buyers. When you reach out to a buyer you need to communicate the acquisition thesis, or the reason why making the acquisition will provide value to the buyer. For example, a CRM company might want to acquire a lead enrichment company in order to cross-sell to the same customer base -- sales teams. The acquisition thesis varies from one buyer to another, so using AI to personalize outreach can do a much better job than simple email templates. By combining AI automation and human review, we get the best of both worlds: faster turnaround times and more comprehensive outreach. That being said, we've found that there are some steps that cannot be automated, such as negotiation and closing. For the later stages of the deal, you'll be working entirely with a human M&A advisor, so there is a services component to our offering.

Thanks @orchyan!

@adamgold7 Right now we have 1000+ buyers in our network across the three different categories: search funds, private equity, and strategic buyers.