Acquire another SaaS product

Why Acquiring a SaaS Is a Potent Growth Strategy

Growth by acquisition is about buying time and traction. Instead of spending months or years building a new feature, entering a new market segment, or building an audience from scratch, you can acquire a company that has already done the hard work. This immediately bolts on new revenue, customers, and technology, letting you leapfrog competitors and significantly accelerate your roadmap.

Beyond the product and revenue, acquisitions are a powerful way to win talent and market position. You can acquire a skilled team that would be difficult to hire one by one (an 'acqui-hire'). It also allows you to consolidate the market, increase your pricing power, and combine two user bases for stronger network effects. Done right, 1+1 can equal 3.

Three real examples

Acqui-hiring can be a cheat code for talent. Sometimes the best 'deal' is a struggling product with a brilliant team that you can refocus on your core mission.

The step-by-step playbook

1. 1

   1. Define Your Acquisition Thesis

   Why are you buying? Be specific. Is it to acquire customers in a new vertical, buy a specific technology, hire a team, or enter a new geography? Your thesis will guide every other decision.

2. 2

   2. Establish a Budget and Criteria

   Define your ideal target. What's the maximum price you'll pay? What's the minimum ARR? What tech stack must it have? Be ruthless with your criteria to avoid wasting time.

3. 3

   3. Source Potential Targets

   Start looking for companies that fit your criteria. Use marketplaces like 'Buy/Sell Startups', watch communities like Indie Hackers, and monitor your competitors and adjacent tools. Build a list in a spreadsheet or CRM.

4. 4

   4. Make Initial, Quiet Contact

   Reach out to the founder of a target company. Your goal is a simple, exploratory conversation. See the script below. Don't start with a hard offer- start with a compliment and a question.

5. 5

   5. Sign a Letter of Intent (LOI)

   If there's mutual interest, you'll work towards an LOI. This is a non-binding agreement that outlines the proposed price, terms, and an exclusivity period ('no-shop clause') for you to conduct due diligence.

6. 6

   6. Conduct Full Due Diligence

   This is the most critical phase. You need to verify everything the seller has claimed. Dig into their financials (Stripe/Paddle data), analytics (Google Analytics, June.so), code, contracts, and customer list. Involve a lawyer and an accountant.

7. 7

   7. Negotiate and Sign the APA

   Once due diligence is clear, you'll negotiate the final Asset Purchase Agreement (APA). This is the legally binding contract that transfers the assets (code, domain, customer list, etc.) to you. Get your lawyer to draft or review this.

8. 8

   8. Close, Announce, and Integrate

   After the APA is signed and the money is wired, the deal is closed. Plan your announcement to customers and your team. More importantly, have a clear plan for integrating the new product, team, and customers into your existing business.

The 'Exploratory Call' Outreach Template

This email template is designed for a soft first touch. It's founder-to-founder, low-pressure, and aims to start a conversation, not force a sale.

Subject: Quick question about {TargetCompany}

Hi {FounderName},

My name is {YourName}, and I'm the founder of {YourCompany}. I've been following your work with {TargetCompany} for a while and I'm really impressed with what you've built - especially {SpecificCompliment, e.g., 'your approach to X' or 'the UI/UX'}.

I'm exploring some strategic growth ideas for {YourCompany} this year, and I was curious if you'd be open to a brief, confidential chat about your journey with {TargetCompany} and your plans for the future.

No pressure at all if the timing isn't right.

Best,
{YourName}

Key Due Diligence Questions to Ask

• Financial: "Can you provide read-only access to your payment processor (Stripe, Paddle) dashboard?"
• Financial: "What is your monthly P&L for the last 12-24 months?"
• Product/Tech: "Can we get a walkthrough of the codebase and architecture?"
• Product/Tech: "What's the history of bugs, downtime, and technical debt?"
• Marketing/Growth: "What are your top 3 customer acquisition channels? Can you grant read-only access to your analytics (e.g., Google Analytics)?"

The most critical questions are always financial. Get verified, read-only access to the payment processor data. Revenue numbers in a spreadsheet are a starting point, but 'trust, but verify' is the motto here.

Recommended tools

Prices are indicative and change - check the vendor before buying.

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Mistakes that kill this play

• ×No Strategic Thesis: Buying a company 'because it's a good deal' is a recipe for disaster. If it doesn't fit your strategic roadmap, it's a distraction.
• ×Overpaying: Getting caught in a bidding war or falling in love with a target can lead you to pay more than it's worth. Stick to your budget and valuation model.
• ×Ignoring Cultural Fit: When acquiring a team, a mismatch in culture can lead to key employees leaving post-acquisition, destroying the value you just bought.
• ×Shallow Due Diligence: Don't just take the founder's word for it. Verify every metric from the source: Stripe, Google Analytics, etc. A small hidden problem can become a huge one later.
• ×Botching the Integration: The deal isn't done when the papers are signed. A poor integration process for the product, team, and customers will destroy value and cause chaos.
• ×Getting Distracted: An acquisition process is incredibly time-consuming. Don't let it distract you from running your core business. Delegate tasks where possible.

Your First 7 Days

• Day 1: Hold a strategy meeting with your leadership team. Solidify your acquisition thesis: What kind of company are you looking for and why?
• Day 2: Begin market research. Identify 2-3 categories of tools or companies that fit your thesis.
• Day 3: Create a longlist of 20-30 potential targets in a spreadsheet or CRM. Include company name, URL, estimated ARR, and a note on why it fits the thesis.
• Day 4: Use a tool like Apollo.io to find the founder's name and contact info for your top 10 targets.
• Day 5: Draft your initial outreach email template. Get feedback from an advisor or a trusted peer.
• Day 6: Send your first 3-5 outreach emails. Personalize each one. Track the opens and replies.
• Day 7: Review the week. What did you learn from your initial research and outreach? Refine your target list and criteria based on your findings.

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