What founders don’t hear about failed SaaS exits with Joran Hofman @Reditus

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 #39 of season 5, Anna Nadeina talks with Joran, founder of Reditus, affiliate management software tailored for SaaS businesses.

On the saas.unbound podcast I spoke with Joran Hofman, founder of Reditus — an affiliate management platform for SaaS companies — about an acquisition process that sounded promising but ultimately fell apart. We dug into how it started, what due diligence uncovered, the red flags that emerged, and the practical lessons every founder should know before stepping into an M&A process.

How the acquisition conversation began

Sometimes acquisition conversations arrive when you least expect them. For Reditus it started like this: after a routine demo with a prospective customer, an offhand Friday email changed the trajectory of the next seven months.

“Are you actually looking to sell your company?”

Joran admits he responded a little playfully: “Yeah, sure — give me an offer.” That reply led to a follow-up that included a high-level number and the start of negotiations. The buyer positioned themselves as bootstrapped and experienced in SaaS — promising, but not proof of execution.

Initial terms and the “too-good-to-be-true” feeling

The headline numbers felt attractive: a decent upfront payment (roughly 30–40% of the purchase price) with the remainder structured as an earnout. For a bootstrapped, early-stage team that hadn’t paid themselves salaries yet, that structure looked sensible. But most of the value depended on future performance, which inevitably introduced trust and liability questions.

Key takeaways from the first stage:

• Small teams often focus on the headline number and underestimate the downstream complexity of earnouts.
• An LOI can already be lengthy and nuanced — this one grew into a multi-page document that revealed early complexity.
• Selling to a customer can be ideal (they know the product) — but it still requires full vetting of the buyer.

What we put into the data room (and why it’s essentially just a Google Drive)

Due diligence required assembling everything a buyer might want to inspect. As Joran puts it:

“A data room sounds always super fancy, but in the end it’s just a Google Drive link.”

For Reditus the data room included:

• Contracts with clients, employees, and freelancers
• Monthly financial and marketing metrics (they already had a metrics sheet)
• Product analytics: growth of affiliates, number of SaaS customers, commission activity
• Technical architecture documentation and a staging environment (no production user data access)
• Strategy documents and roadmaps — many had to be created for the process

Commercial, technical and legal due diligence — what we learned

The buyer ran a standard three-part due diligence:

Commercial diligence

The buyer wanted proof the platform actually delivered value. With 100+ paying customers and 20,000+ affiliates in the network, Reditus had traction — but lacked fully instrumented funnel metrics (website → signup → paid conversion, time-to-first-commission, etc.).

Lesson: have your funnel and conversion metrics ready. Early-stage hacks and spreadsheets work, but extracting clean historical numbers during diligence is painful if systems aren’t set up.

Technical diligence

The buyer hired a consultancy of technical auditors and inspected the codebase via staging. Technical DD lasted a few weeks and produced a report that flagged a handful of issues — most were easy to fix and were added to Reditus’ roadmap.

Pluses: the third-party review gave confidence and surfaced improvements. The staging-only approach protected user privacy.

Legal diligence

This proved to be the most draining part. Contracts ballooned (a shareholder purchase agreement reached ~55 pages), and legal language contained small nuances that could create big liabilities. Joran leaned heavily on his lawyer’s advice and discovered how quickly legal fees add up.

Practical note: legal counsel early in the process is essential — especially to interpret LOIs and to craft safeguards for earnouts, IP protection, and payment contingencies.

Early red flags and where things went wrong

Several warning signs emerged over time:

• Financial structure: although the buyer initially claimed cash on hand, the deal became contingent on a bank loan. The buyer kept pushing that financing was required and that the loan was a hard condition.
• Buyer experience: this was the buyer’s first acquisition. They outsourced much of the process (consultants, lawyers) and needed to figure things out as they went, which introduced delays and uncertainty.
• Dependence on earnouts: a large portion of the purchase price was tied to future performance, increasing the need for contractual protections against buyer insolvency or other risks.

Joran’s lawyer flagged the financing risk early, urging contract clauses to protect Reditus’ interests. Ultimately the buyer couldn’t secure the required national-level approval for their financing and pulled out.

The emotional and operational toll — 7 months that felt like a blur

The acquisition process lasted about seven months. During that time Joran’s attention shifted from sales and day‑to‑day growth to chase documents, respond to diligence requests, and interpret dense legal clauses. Two results followed:

• Sales momentum slowed because the founder, the company’s primary salesperson, was distracted.
• Team uncertainty: the small team of three knew about the process (technical DD required developer involvement), and the prospect of a deal affected people’s expectations about roles and compensation.

When the buyer canceled over a quick five‑minute call, the relief was mixed with frustration: months of work, consulting invoices paid by both sides, and developer distractions that had delayed product focus.

Why the deal collapsed — short summary

• The buyer failed to obtain the national approval required for their loan financing.
• The buyer reallocated focus internally to another product they were building, reducing appetite to integrate Reditus as a third product.
• Despite legal protections (including a clause for the buyer to cover legal costs up to a threshold), the financing and strategic shift were fatal to the transaction.

Concrete lessons and recommendations for founders

From Joran’s experience, here are the practical rules I’d pass along to any founder entering M&A conversations:

1. Get legal counsel early. Review LOIs with an experienced M&A lawyer before you agree to timelines or disclosures.
2. Due diligence your buyer. Don’t be blinded by a shiny headline price. Verify financing capability, acquisition experience, and strategic motivation.
3. Insist on timelines and milestones. If you’re expected to provide information, demand realistic timelines from the buyer and consider hard stop conditions if financing isn’t secured by X date.
4. Build contractual safeguards. Add clauses to protect earnouts, require escrow or payment schedules, and cap legal costs if the buyer walks away after significant DD.
5. Keep growing the business. Treat the acquisition process as a possibility, not a certainty. Sustained growth strengthens your negotiating position and reduces distraction harm.
6. Instrument your funnel. Track website → signup → paid conversions, time-to-first-value, affiliate activation rates — these are the metrics acquirers ask for.
7. Use staging for technical DD. Provide auditors access to staging environments to protect user PII and comply with privacy rules.
8. Trademark early when needed. Even small companies should consider IP steps proactively; Reditus filed for trademark during the process.

What changed at Reditus after the process

The process forced several product and operational improvements that will pay dividends later:

• Reditus improved analytics and began building funnel instrumentation to measure conversion and time-to-first-commission.
• The team filed a trademark for the brand.
• Technical DD produced a third-party review and a prioritized technical roadmap of fixes.
• They refocused on sales and regained momentum.

Where Reditus is headed next

Reditus remains focused on delivering faster time-to-value for SaaS companies and their affiliates. Current footprint highlights:

• 20,000+ affiliates in the network
• 100+ paying SaaS customers, including recognizable names like Expand, Mero, and OneFlow

The next big product push is an AI feature that proactively finds affiliates for SaaS companies. The idea: use competitor signals, keywords, influencers, communities, newsletters and other signals to identify people and channels that match an ICP, then recommend those as potential affiliates so companies can reach out and recruit them.

A practical founder hack: prototype AI features without a full dev cycle

One pragmatic tip Joran shared: use modern AI and no-code tooling to build prototypes before committing dev resources. His stack for rapid MVPs:

• AI tooling (e.g., Lovable) to power agents
• Supabase for a quick database backend
• n8n for automations and integrations

With that combination he built working prototypes and handed them to customers for early feedback — enabling product validation and frontend design before backend refactors. This approach speeds iteration and reduces developer guessing.

Final thoughts — preparing for the next time

Failed acquisitions are painful, but they’re also instructive. For Reditus the process was disruptive, expensive, and emotionally draining — but it surfaced weaknesses (analytics, legal readiness) and produced focused improvements. If you’re a founder preparing for M&A:

• Don’t let a single offer derail your growth engine.
• Vet the buyer as thoroughly as they vet you.
• Use the process as an opportunity to mature your documentation, metrics and product planning.

Above all: keep building. A strong company is the best hedge against a process that drags on or ultimately fails. And when the right buyer comes — one with the financing, experience, and strategic fit — you’ll be ready.