acquiredotcom
Kjael Skaalerud, President of Skaling Ventures, discusses the art and science of acquiring micro-SaaS startups. He shares his background in vertical SaaS and his openness to both vertical and horizontal SaaS plays. He highlights the importance of seller DNA and building a good relationship during the acquisition process. The key factors they consider when evaluating acquisitions include cash flows, organic channels, retention, product-market fit, technical debt, and the need for enhancements. They emphasize the significance of evaluating these factors to determine if the acquisition is a good fit. Skaalerud also discusses the ideal timeframe for seller transitions and the importance of considering base rates and comps when determining valuation. Overall, he advises a thoughtful and strategic approach to acquiring and transitioning micro-SaaS startups.
In this section, Kale discusses his background and the type of businesses he is looking to acquire. He has a history in vertical SaaS and is also open to horizontal SaaS plays. He aims to avoid the pitfall of targeting niche markets by thinking about how to verticalize a horizontal play. His ideal acquisition would be in the B2B space and fall into the 10 to 40K MRR range. Additionally, he emphasizes the importance of seller DNA in the acquisition process.
In this section, the speaker discusses the key factors they consider when acquiring micro-SaaS startups. They emphasize the importance of building a good relationship with the seller, as the transition process is critical for success. They describe an ideal scenario where the startup has established cash flows and one organic channel. They also prioritize retention and product-market fit during their due diligence process. Furthermore, they evaluate the technical debt and the need for product enhancements. Overall, they emphasize the significance of evaluating these factors to determine if the acquisition is a good fit.
In this section, Kjael Skaalerud discusses the key factors that his firm considers when acquiring micro-SaaS startups. He mentions that they look at multiples, growth, and profit margin, but they keep an open mind and don't necessarily see deviations from their ideal metrics as deal-breakers. He also advises sellers to be transparent about any growth opportunities or areas of optimization in their businesses, as these can be seen as potential value drivers by buyers. Furthermore, he emphasizes the importance of clearly articulating the seller's vision and expertise, as well as being prepared with the necessary data and systems of record for due diligence.
In this section, the speaker discusses the importance of being able to access and analyze the data and systems of a micro-SaaS startup during the acquisition process. They emphasize the need for the seller to articulate their target customer profile, value proposition, customer acquisition and conversion strategies, and differentiation from competitors. It is important for the seller to have their operational systems in order and be able to demonstrate the metrics and performance of their business. The speaker also mentions that a clean transition period, where the seller provides guidance and support for a certain period of time, is ideal for a smooth acquisition.
In this section, Kjael Skaalerud discusses the ideal timeframe for seller transitions in the acquisition of micro-SaaS startups. He suggests that for startups with a complexity level of $500k to $1 million ARR, a 90-day or three-month transition period is optimal. In this scenario, the seller is usually the main person involved, without a large team to manage. He also emphasizes the importance of keeping the original owner involved in a limited capacity, even after the acquisition, to mitigate risks and address any unexpected issues that may arise. Additionally, he mentions the potential for repeat acquisitions and building relationships with entrepreneurs and builders to create a portfolio of micro-SaaS projects. Overall, Skaalerud emphasizes the need for a thoughtful and strategic approach to acquiring and transitioning micro-SaaS startups, rather than simply buying and selling without consideration for the ongoing dynamics of the business.
In this section, Kjael Skaalerud discusses the importance of considering base rates and comps when acquiring micro-SaaS startups. He emphasizes that everything, from the performance of the business to the valuation, is relative to the peer group. He advises sellers to understand their peer group and benchmark their performance accordingly, as an unrealistic valuation can signal a lack of knowledge or be a red flag for buyers. Kjael also stresses the need for simplicity and rationality when determining valuation, comparing it to selling a house and using market comparables on platforms like Zillow. He suggests being open to a spectrum of value and setting aside personal attachment for a better outcome. For those interested in learning more or discussing selling their startup, Kjael can be found on LinkedIn and his firm, Scaling Ventures, has a substack for further insights.
In this section, the speaker expresses appreciation for the acquisitions made by acquire.com and acknowledges the role of his team in the success. He also mentions the possibility of future acquisitions and thanks the person he is talking to.
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