How to sell your SaaS: from LOI to exit with Pavel Prokofiev and Juan Ignacio García Braschi

saas.unbound is a podcast for and about founders who are working on scaling inspiring products that people love, brought to you by https://saas.group/, a serial acquirer of B2B SaaS companies.

In episode #43 of season 5, Anna Nadeina talks with Juan Ignacio, the founder of L40, M&A advisory for founders, and Pavel, Head of M&A from saas.group, covering both buyer and seller sides of the deal.

Selling a SaaS business is equal parts preparation, market knowledge, and human judgment. Whether you are a founder thinking about an eventual exit or you just received an inquisitive email from a buyer, this guide walks you through the whole journey: common founder questions, valuation logic, choosing the right buyer, deal structure, due diligence, red flags, and practical preparation steps that make transactions close faster and cleaner.

Who this advice is for

This guidance is geared toward founders of B2B SaaS and tech businesses (typically revenue ranges from early millions up). It covers both sides of the deal: what sellers usually ask and what buyers (strategic or acquirers focused on product led growth) actually do when assessing deals.

Quick overview: what founders ask first

• What is my company worth? (valuation)
• How does the process work and what will due diligence look like?
• Will I stay on after acquisition and if so under what terms?
• Is the buyer credible and able to close the deal?

Valuation: how to set realistic expectations

Valuation in SaaS typically lands on revenue multiples or EBITDA multiples depending on business maturity and buyer type. There is no universal “right” number for every company. Use advisors and multiple reference points to calibrate a range.

Key principles:

• Get independent valuation input. Founders are not usually market valuation experts; leverage advisors who close deals regularly.
• Compare offers across buyer types. Strategics sometimes pay more, but financial buyers can outbid strategics depending on the opportunity.
• Think about deal currency. Cash up front versus equity rollover or earnouts dramatically changes your outcome and risk.

“Buyers need to be able to make money from the transaction.”

Stakeholders on the buyer side will always think about returns. If you expect an outsized multiple, ask whether the buyer can create the required ROI and whether that aligns with your desired structure.

Choosing the right buyer: strategic, PE, or roll-up platform?

Which buyer to pursue depends on your goals and the business profile:

• Strategic buyers: Can pay a premium for strategic fit or market timing. They can be more bureaucratic and slow (board approvals matter).
• Financial buyers / PE: Focused on returns and often require scale. Many PE buyers are not interested in very small businesses.
• Roll-up platforms and acquirers focused on product led growth: They are often sector-agnostic, buy many small profitable businesses, and can offer faster, cleaner cash transactions.

Decide based on whether you want to stay and grow the company post-sale, how quickly you want to exit, and what mix of cash versus deferred consideration you prefer.

Deal structures and exit planning

There is no one-size-fits-all structure, but most SaaS deals include a mix of:

• Upfront cash
• Deferred payments linked to performance (earnouts)
• Equity rollovers or retention incentives if you stay on

If you plan to stay and grow the company, deferred consideration tied to performance can increase your total proceeds. If you want a quick clean exit, focus on maximizing cash up front and be prepared to accept a lower headline multiple.

What buyers love (ideal target profile)

• Automated, self-service product led growth motion
• Clean, recurring revenue and billing (Stripe, Paddle, etc.)
• Lean teams or single-founder operations that run on autopilot
• Accurate tracking of key metrics: net dollar retention (NDR), churn, cohorts
• Clean accounting and readily accessible financials (QuickBooks, proper deferred revenue)

Buyers often prefer businesses that do not rely heavily on one founder or a founder’s personal network to generate sales.

Common red flags that repel buyers

• High founder dependency in sales and customer relationships
• Poorly organized financials, missing deferred revenue accounting, or opaque bookkeeping
• Legal or compliance exposure, especially involving personal data or resale of data
• Unclear IP ownership or missing IP assignment clauses in employee agreements
• Secretive sellers or competitors included too early in the process (sellers often do not want competitors seeing sensitive information)

Due diligence: what to expect and how long it takes

Due diligence is the most feared phase, but if you prepare it is manageable. Buyers only dig into what matters to validate the deal. Typical focus areas and timeline:

• Pre-LOI / early diligence: High-level financials, KPIs, customer motion, basic legal checks. Buyers use this to shape an initial offer.
• Post-LOI / structured diligence: Two main phases—commercial validation then legal and confirmatory checks. Commercial checks include cohort analysis, NDR, customer surveys, and voice of customer. Legal checks include contracts, employment, IP, tax.
• Typical timing: Practical buyers close commercial diligence in 4 to 6 weeks; an end-to-end process is commonly 6 to 8 weeks. Lack of preparation can push this beyond two months.

Common due diligence items that often slow deals down:

• Missing or messy employment contracts and IP assignment
• No data room or poorly organised documentation
• Accounting quirks: cash accounting, missing deferred revenue, capitalised R&D inconsistencies
• Customer concentration issues that are not properly documented

Due diligence checklist for founders

• Clean financial statements and reconciliations; explain any one-off items
• Detailed revenue and churn cohorts; exportable subscription data (Stripe, Paddle, chargebee)
• Customer list with revenue contribution, contract terms, renewal dates
• Employee contracts, IP assignment clauses, contractor agreements
• Documentation of technology stack, hosting, and any third-party dependencies
• Tax and corporate structure documents
• Evidence of buyer credibility requests: request process letters and proof of financing when assessing buyers
• Data room set up before term sheet is signed wherever possible

How buyers verify intent and ability to close

Sellers should ask buyers for:

• Clear process letter detailing the buyer’s due diligence steps
• Proof of financing or debt facilities if relevant
• Decision-making timeline and required approvals (board, investment committee)

Ask for specifics early to root out brokers or undercapitalised bidders. Good advisers will pre-screen buyers and present only credible parties.

AI in SaaS: should you expect a premium?

AI is a competitive advantage but not an automatic multiplier. Buyers currently fall into a few categories when assessing AI-enabled products:

• Companies that serve the AI ecosystem (infrastructural, API businesses) and thus benefit from rising demand
• Products whose core use case is amplified by AI, leading to faster growth
• Traditional software that embeds AI agents to increase efficiency

At present, buyers are cautious about paying a long-term premium purely because a product uses AI. Valuation will still be driven by current revenue and profit, not hypothetical future efficiency gains. Buyers may pay slightly higher revenue multiples for sustainable AI advantages, but core EBITDA-based returns remain fundamental.

How to approach offers and multiple bidders

• Keep an open mind about buyer types in early stages. Do not close doors prematurely.
• Compare not only headline price but structure: cash up front, earnouts, equity rolls, and timing for payouts.
• Insist on speaking to decision makers early, especially with strategic buyers. If you cannot reach someone senior within a call or two, that is a warning sign.
• Ask for detailed offers that explain financing, required approvals, and the due diligence plan.

Timeline summary

1. Preparation and pre-marketing: ideally 6 to 12 months if business needs cleanup
2. Initial outreach and qualification: weeks
3. Offer and LOI negotiation: 1 to 3 weeks
4. Due diligence and contract negotiation: 4 to 8 weeks typical
5. Signing and closing: depends on structure and regulatory requirements

Practical hacks founders often overlook

• Personal fit matters. You will be working with people on the other side of the table after signing. If the relationship does not feel right, step back.
  

  “Make sure that you’re connecting personally with the people that you’re talking to.”

• Be proactive with buyers. High-quality buyers manage many opportunities. If you want a buyer’s attention, follow up and articulate why your business should move to the top of the queue.
• Vet buyers early. Ask for evidence of financing and a clear diligence timeline before you invest a lot of time.
• Do the data room work early. A clean data room and complete employment/IP documents speed up diligence and reduce negotiating friction.

Top deal killers to avoid

• Hidden legal exposure around data use or IP ownership
• Founder-dependent revenue with no clear succession plan
• Financials with material irregularities or undocumented revenue recognition
• Inability to produce proof of customer health or recurring billing records

Where to get help and next steps

If you want advice or to discuss your company profile, talk to both types of experts: a sell-side advisor who knows buyers across markets and a buyer who knows what matters for quick integration. Ask advisors to identify the most likely buyer types and provide a valuation range, and ask buyers for a process letter and proof of financing.

Contact suggestions (names to look up on LinkedIn): Juan Ignacio García Braschi (founder of an M&A advisory focused on founders) and Pavel Prokofiev (Head of M&A at a serial acquirer of B2B SaaS). For acquirers that buy many small profitable SaaS companies, reach out to their M&A teams directly (for example, general inquiry channels such as info@saas.group are commonly used to start conversations).

Final thought

Selling a SaaS is both technical and personal. Get your financials and legal housekeeping in order, know your metrics, and spend time finding a buyer who is the right fit for your goals. Be open to different buyer types, insist on proof of capacity to close, and prioritize the human relationship as much as the headline number.