How to Buy a SaaS Business for the First Time (Step-by-Step Guide)
Buying your first SaaS business is intimidating. This step-by-step guide walks you through finding, evaluating, negotiating, and closing.
Step 1: Decide what you actually want
Define: budget range, target MRR or ARR, industries you understand, time you can commit to operating it. Vague criteria lead to bad decisions.
Step 2: Find platforms for sale
Browse curated marketplaces (hades.ae for premium builder-owned platforms), Acquire.com for under-$1M SaaS, Empire Flippers for content + SaaS over $100K.
Step 3: Initial vetting
Before requesting financials, check: does the product solve a real problem? Do reviews exist? Is the website still up? Is the seller responsive?
Step 4: NDA and financials review
Sign NDA, request: 12 months of MRR/ARR, churn rate, customer acquisition cost, top 10 customer concentration, expense breakdown, traffic sources.
Step 5: Tech due diligence
Review: source code, hosting setup, security audit, third-party dependencies, technical debt. If non-technical, hire a developer for 2-3 hours of review.
Step 6: Negotiate
SaaS businesses sell at 2-5x annual revenue typically. Profitable + growing = top of range. Make a fair offer with rationale.
Step 7: Letter of Intent (LOI)
Non-binding agreement covering price, payment terms, due diligence period (typically 30 days), and exclusivity.
Step 8: Deep due diligence
Verify customer list, revenue claims, tech stack, IP ownership, any pending legal issues. Spend 2-4 weeks here.
Step 9: Asset Purchase Agreement (APA)
Final contract. Include: list of assets, representations and warranties, indemnification, non-compete, transition support period.
Step 10: Escrow and close
Use Escrow.com for payment protection. Standard fees: 0.89% of deal value.
Ready to acquire?
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