This week, an entrepreneur/software dev, Janet, interviews Johnny to explore a SaaS that Janet wants to buy. She goes through a series of questions to prep herself for the investigation into the buying process.
00:01 Intro
1:00 How Janet got into software and her background
14:00 Janet is looking to buy a SaaS
14:30 Do you need an investment thesis before buying? How do you come up with it?
17:06 How to value a business?
20:03 What can you ask the seller during a sale?
21:45 Can you find out other SaaS metrics like ARPU, Lifetime value?
25:14 Is it necessary for a buyer to have experience or the grand vision of the business?
27:13 Buying a SaaS is like running a local coffee shop rather than creating Starbucks
27:27 How do you structure a deal?
29:43 How do you find a lawyer to help you with closing SaaS deals?
31:01 Can you ask for certain clauses to be baked in to the purchase agreement? eg Non-compete
31:34 Can you include the list of customers and/or service agreement in the purchase agreement?
32:45 How would you handle rebranding of the asset after the acquisition?
References:
How to Buy Small Companies Course—where Matt and Johnny met (This is an affiliate link)
Seller's Discretionary Earnings
Johnny's portfolio & updates
https://newsletter.johnnytong.com
Matt's portfolio
https://wpdiscussionboard.com/
Follow us on Twitter for more live deal/progress updates
Our podcast is edited by Rory Jongkergouw