TECHNOLOGY

Where to Sell Your Software Business and How to Get the Best Price

Get the the price your deserve.

Share on
BY Jordan Kasteler - 08 Oct 2017

PHOTO CREDIT: Getty Images

Is your software company worth more if it's big, or if it's growing?

That can be hard to discern. Yet, SaaS companies doing 1 million dollars or less in revenue had the highest average growth rates in 2016. This could mean that your lean and growing software business will have a great valuation should you decide to sell.

But of course if you actually want to sell your software business, things are a bit more complex than that.

There are several factors to consider when assigning a value to a software or SAAS website. Growth is only one consideration. If figuring out valuation is complex, imagine adding all of the tasks involved in selling a software or SAAS website to that.

What we do know is that SAAS is predicted to surpass 112 billion dollars in revenue in less than two years. As a result, software businesses are a hot commodity.

If you've got a healthy software company, there's a good chance you could make a lot of money selling your company. However, the complexities involved can be difficult to overcome. This is why using a website broker is so important to ensuring that you get price you deserve for your website, and that the sales process goes smoothly.

The following three brokers have a proven track record of helping entrepreneurs sell your software company.

1. Digital Exits

If you search for software business brokers online, Digital Exits will be found at or near the top of your search results. This means organic results, not positioning thanks to advertising.

Digital Exit brokers in a wide variety of websites, to include software companies. They focus on software businesses making between $100,000 per year and $3m per year in profit.

One of the more notable deals they have brokered is the sale of WPTouch from Brave New Code. In a testimonial posted on the website, Dale Mugford details the following points about his experience selling his software company:

  • Digital Exits showed an understanding of the nature of a digital business.
  • They were given clear insight into how the process would unfold and their expected role in it.
  • Jock Purtle did the work of finding the best buyer for WPTouch.
  • Mugford felt that he was kept up to date and in the loop throughout the process.
  • They were very carefully curated quality buyers.

2. Flippa

Flippa is designed for those who prefer to take on the task of selling their website with little to no outside help. While software and SAAS services can and have been sold here, there is no specific assistance or advice given to people selling websites of any particular type. This is simply an Ebay style marketplace for websites. Therefore Flippa.com is best for startup software businesses and software businesses making a small amount of money.

As such, Googling the company does little to bring up any insights. This fact shouldn't be used as a negative against Flippa, however. The site does appear to be meeting an important need. People who feel confident in setting their own website valuation and dealing directly with buyers may find that Flippa is a good choice.

On the other hand, there are certain concerns voiced by sellers. There is no vetting process for buyers for one thing. Another issue is a lack of any due diligence process.

3. Corum Group

If you're interested in working with a M&A firm that exclusively deals in large software mergers and acquisitions, Corum Group is definitely one to consider. They represent software companies making at lease $3m per year in profit.

While the other brokers listed here deal in a wide variety of internet business, Corum has opted to specialize. Operating on a global scale they have assisted clients in generating 7 billion dollars in revenue.

To help sellers through the acquisition process, the company has created an 8-step process. This process begins with preparing your website for sale with tasks such as getting financial information in order. Researching buyers, contacting potential buyers, discovery, negotiation, and due diligence follow. The end goal is obviously closing the deal and ensuring that the transfer of business goes smoothly.

Your software or SAAS business could be worth quite a bit of money. To get the most out of your sale, it's advisable that you use a brokerage firm of some sort. Depending on your specific needs and expectations, any one of the brokers on this list could be a great fit.