How to Sell a SaaS Business

By Phillip Mitchell, Founder & Chief Brokerage Officer, AIExchange.club

Almost everything written about selling a SaaS business is written for companies fifty times larger than yours. The advisory firms publishing exit guides work deals with median sizes in the tens of millions. Their advice isn't wrong — it's just aimed somewhere else, and it quietly assumes you have a CFO, audited accounts and a management team.

This is written for the other end: bootstrapped SaaS between roughly $20,000 and $1,000,000, usually one founder, usually no team. Different buyers, different multiples, different process, different things that go wrong.

First: should you actually sell?

Nobody in this business will tell you not to sell, because everybody publishing exit advice gets paid when you do. So run the arithmetic before you read anyone's process.

A sale at 3.2x SDE hands you three years and two months of profit, upfront and de-risked. The question is whether the business will still be producing that profit in year four, five and six.

The arithmetic nobody publishes

Take a business at $10,000 MRR with $73,000 in real owner earnings — a fairly typical shape at this end of the market.

Sold at 3.2x SDE, that's a headline of roughly $234,000. Take out a 10% success fee and legal, and you keep about $207,600 before tax — of which roughly $184,000 arrives at close and the rest six months later.

Kept, it produces $73,000 a year. So the sale is worth about two years and ten months of post-fee profit — not the three years and two months the multiple implies, because the multiple is applied before costs come out.

Which means the real question is narrow and answerable: will this business still be producing $73,000 a year in three years' time?

• If it's growing and retention is solid, almost certainly yes — and keeping it wins on gross dollars by a wide margin. You're selling three years and two months of profit for two years and ten months.
• If churn is 5% monthly and flat, almost certainly not. At that rate you lose roughly half your customer base annually and buy the replacements with paid acquisition. Selling captures value that is actively draining.
• If you've stopped working on it, the decline hasn't shown up in the numbers yet but it will, usually within two quarters. Sell while the trailing twelve months still look like the business you remember.

What the arithmetic doesn't capture, in both directions: keeping it means carrying all the concentration risk in one asset you also work in, and a sale converts an uncertain income stream into certain capital. Some founders should take a slightly worse financial deal for that certainty. Just make it a decision rather than a default.

The honest version: if your business is growing and you don't hate it, keeping it usually wins financially. Selling wins when the trend has turned, when the risk is concentrated, or when the money does something for you that the income stream can't.

What your SaaS is actually worth

Under $1M ARR, buyers price profit rather than revenue. The working range is 2.5x to 4x SDE — seller's discretionary earnings, meaning net profit plus your own salary and any costs that exist only because you own the business. That usually lands between 1x and 3x ARR.

The multiples quoted in the press belong elsewhere. Aventis Advisors' sample of 459 private transactions gives a median of 4.7x revenue — but the median deal size in that sample is around $57M. At $5M–$20M the same dataset shows 3.2x. Below that, published data effectively stops.

Work out your own number with the SaaS valuation method, or check where your category sits in current valuation multiples.

Where to sell: broker, marketplace, or direct

Three routes, and the right one depends almost entirely on your size.

The direct route deserves a warning. Unsolicited offers feel flattering and are usually the worst deals on the table, because the buyer knows they're the only one at the table. If someone approaches you cold, that's a signal your business is sellable — not a signal to accept.

Who actually buys at your size

Knowing who your buyer is changes how you prepare, how you price, and what you emphasise. The pools are quite distinct, and they barely overlap.

The band matters more than founders expect. Under $250,000 you're selling to one person spending their own savings, and that pool is thin, seasonal and easily distracted — the same business at $1M ARR would have institutional buyers competing for it. That difference in demand is most of why the multiple climbs with size.

It also tells you what to fix first. An individual buyer is frightened by founder dependency and technical complexity. A holdco is frightened by churn and concentration. A strategic barely cares about either but will scrutinise your customer list and your code. Prepare for the buyer you'll actually get.

What it costs, and what you actually net

Not one of the major guides on this topic publishes a fee. Not a commission rate, not a retainer, not a worked example of what reaches your account. It is the most asked and least answered question in the category, so here it is plainly.

Here is what we charge, so you can compare it against anyone else you're considering.

• Success fee: 10% of the agreed sale price, paid by the seller at close. That is the entire fee.
• Listing fee: none. Listing is free. There is no retainer, no monthly cost, and no charge if the business doesn't sell.
• Escrow: paid by the buyer. Escrow.com charges 1.5% on transactions between $200,000 and $500,000, with a $3,800 minimum — roughly $3,800 on a $250,000 deal. It doesn't come out of your proceeds.
• Minimum deal size: none. If a business is worth $15,000 and someone wants to buy it, that's a deal worth doing.

Two costs are yours regardless of who you sell through:

• Legal — an asset purchase agreement reviewed by someone who has seen one before. Budget $1,500–$5,000 at this deal size; more if the buyer's lawyer is aggressive. Don't skip this to save $2,000 on a $250,000 transaction.
• Tax — the largest line by far, and entirely dependent on your jurisdiction and structure. Talk to an accountant before you agree terms, not after. The difference between an asset sale and a share sale can be worth more than the fee.

The net-proceeds waterfall

Here is the arithmetic on a $250,000 sale, structured as most deals at this size are — cash at close with a portion held back.

So a "$250,000 exit" is roughly $197,000 in your account at close, before tax, with $25,000 arriving six months later if diligence holds up. That gap between the headline and the wire is the thing nobody writes down, and it's the number you should actually be making decisions on.

Compare that against whatever else you're weighing. The questions worth asking any broker or marketplace: what's the percentage, is it charged on the gross or the net, is there a retainer, is there a minimum fee, who pays escrow, and what happens if the business doesn't sell. If those answers aren't published somewhere you can read them before getting on a call, that itself tells you something.

How long it takes, stage by stage

"Several months" is the answer most guides give. Here is the actual shape of it for a sub-$1M deal.

Realistic total: three to five months from decision to money, plus the handover. Empire Flippers reports an average of 47 days on market for businesses that sell, and 14 days as a typical diligence window — faster than most, and that's a marketplace with a large standing buyer pool. A prepared business moves fast; an unprepared one spends six weeks in cleanup that could have happened before listing.

On exclusivity

A buyer will often ask for a 30–60 day exclusivity period after a letter of intent. You do not have to agree to it, and at this deal size you frequently shouldn't — or should cap it much shorter. Exclusivity removes your only real leverage at precisely the moment the buyer starts renegotiating. If you grant it, tie it to a deadline and a deposit.

What to have ready before you list

Every guide says "prepare your financials." Here is the literal list a buyer will ask for at this size.

• Monthly P&L for the last 24–36 months, with your add-backs itemised and evidenced
• Stripe or payment processor export covering the same period — the source, not a screenshot
• MRR movement: new, expansion, contraction, churn, by month
• Cohort retention table, and churn broken out by plan
• Customer concentration: top ten customers as a percentage of revenue
• Traffic and acquisition: analytics access, and the organic/paid split
• Cost breakdown: hosting, inference, processing, tools, contractors
• IP assignment agreements for every contractor who has ever touched the code
• Third-party dependency list: APIs, models, licences, and what each costs
• Open-source licence audit — specifically anything copyleft in a commercial product
• Domain, DNS and account inventory, with owner of record for each
• Customer contracts or terms, including auto-renewal and any change-of-control clauses
• Standard operating procedures for support, deployment, billing and onboarding

Assembling this takes two to four weeks and is the single highest-return use of your time in the entire process. It shortens diligence, it prevents re-trading, and a buyer who receives it organised assumes — correctly — that the rest of the business is run the same way.

What actually kills small deals

Deals at this size rarely die over price. They die over things the founder didn't think mattered.

• Contractor IP was never assigned. The developer who built your core feature in 2023 still legally owns it. This is the most common deal-killer at small scale and the most tedious to fix retroactively.
• Payments run through a personal account. A Stripe account in your own name, mixed with personal income, makes revenue unverifiable and the transfer messy.
• The domain sits in a personal registrar with two-factor tied to a phone number you're about to change.
• Copyleft code in a commercial product. One GPL dependency can force disclosure obligations a buyer won't accept.
• Undisclosed churn. The bad quarter you hoped nobody would notice always surfaces in diligence, and it costs you more in lost trust than it would have cost in price.
• Shared infrastructure. The product runs on servers, accounts or codebases shared with another business you own, and nobody can cleanly separate them.
• Revenue that isn't recurring. Setup fees, consulting and one-off work counted as ARR. Buyers strip these out, and the correction usually arrives after the offer.

Every one of these is fixable in advance and expensive to fix mid-deal. Go looking for them before a buyer does.

Selling an AI SaaS business specifically

No major guide on selling SaaS addresses AI at all, and buyers are now asking these questions first. Software Equity Group's 2025 buyer survey found 84% of buyers want SaaS companies to demonstrate an understanding of AI — but for AI-native businesses the questions go considerably deeper than that.

Have your answers ready, in writing, before you list:

• Gross margin after inference. Model spend is a variable cost belonging in COGS, and AI-heavy businesses run 50–60% gross margins against 60–80%+ for traditional software. Show margin net of model cost, and what happens to it at three times current usage.
• Model dependency. If switching providers means a rebuild rather than a config change, say so before they find it. Model-agnostic architecture is worth real money.
• The displacement question. "What happens if the model provider ships this natively?" You will be asked. The answer needs to be specific — proprietary data, workflow embedding, integrations, switching cost — not optimism.
• Retention by price point. AI-native businesses average around 48% net revenue retention against 82% for B2B SaaS overall, and products under $50/month retain roughly 23% of revenue. If yours is better than that, prove it with a cohort chart; it's a premium.
• Data and output rights. What your terms permit for fine-tuning on customer data, whether that survives a change of control, and who owns generated outputs commercially.

A seller who volunteers all five reads as someone who understands their own business. A seller who has to be asked reads as someone who hasn't looked.

What a deal actually looks like, start to finish

A note on this section: what follows is a composite, not a specific transaction. It's assembled from how deals at this size typically run — the sequence, the sticking points and the arithmetic are all representative, but no single business had exactly these numbers. We'd rather label it plainly than dress an illustration up as a case study.

The business

An AI customer-support tool, three years old. $9,400 MRR, so about $112,800 ARR. After add-backs — the founder's own pay, a one-off rebrand, some personal subscriptions running through the business — SDE lands at $68,000. The founder spends about twelve hours a week on it, mostly support. Churn is 2.8% monthly. Acquisition is roughly 70% organic.

A solid, unremarkable business. Which is exactly what most of them are.

Pricing it

The founder wants $265,000. That's 3.9x SDE — the top of the band for a business at this size, and it assumes everything is clean.

The recommendation is to list there anyway. Not because it will clear, but because pricing is information: it's easier to come down from a number the market rejects than to discover you left $40,000 on the table. What matters is agreeing the walk-away figure first — here, $195,000 — before anyone is negotiating.

On market

Three serious enquiries in the first month, two of which make offers. That second offer is the entire game. A single interested buyer sets the price; two buyers discover it.

Best offer: $238,000, structured as 90% cash at close with 10% held back for six months.

Diligence, where it gets uncomfortable

Two things surface, and neither is unusual:

• A contractor's IP was never assigned. A developer built the classification engine in 2024 under a plain hourly arrangement with no assignment clause. Legally, he still owns it. Fixing it takes two weeks and a small payment for a signed assignment. Had it surfaced a week later, it would have been leverage rather than an errand.
• One customer is 21% of revenue. The founder knew and hadn't volunteered it. The buyer re-trades $6,000 off the price — a modest correction, but it would have been nothing at all if it had been disclosed up front.

Final price: $232,000. That's 3.41x SDE, or about 2.1x ARR.

What the founder actually banks

Listing to funds: about four and a half months. Handover: 60 days, roughly five hours a week, tapering.

What would have changed the number

Disclosing the concentration up front saves the $6,000 re-trade. Sorting the IP assignment before listing removes two weeks and a moment where the buyer could have walked. Getting the largest customer under 15% of revenue in the year before selling would have been worth considerably more than either — plausibly a full turn on the multiple.

None of that is dramatic. It's just preparation, done earlier.

Negotiating: the headline price is not the deal

Two offers at $250,000 can be worth wildly different amounts. What matters is the split.

• Cash at close — the only part that is certain. Optimise for this.
• Holdback — typically 10% for 3–6 months, released if nothing surfaces. Reasonable, and usually paid.
• Seller note — you finance part of the price and get paid over 12–24 months. You're now the buyer's lender, carrying their risk.
• Earnout — contingent on future performance you no longer control. Treat as a bonus, not as price.

A $300,000 offer that is $180,000 at close with $120,000 contingent is a worse deal than $250,000 in cash, and it will be presented to you as the better one. Ask for the cash-at-close figure in the first conversation and compare offers on that line only.

Two things that materially improve your position: a second interested buyer, and a genuine willingness to walk away. You don't need to bluff. You need an actual number below which keeping the business is the better outcome — decided before negotiation starts, not during it.

After the close

The deal isn't done when the money lands.

Transition typically runs 30–90 days: documentation, introductions, answering questions, migrating accounts. Agree the hours per week in writing. "Reasonable support" means whatever the buyer decides it means.

Non-compete clauses are standard and negotiable. Push back on anything vague or open-ended — a two-year restriction on "AI software" would end your career, while a two-year restriction on your specific niche is fair.

Customer communication should be agreed before close. Most buyers prefer a warm handover note from you; it materially reduces churn in the first quarter, which protects your holdback.

Frequently asked questions

How do I sell my SaaS business?

Five stages: prepare your financials and metrics so they can be independently verified, get a realistic valuation, choose a route (marketplace, broker, or direct), run diligence with a buyer, then close through escrow with a handover period. For a bootstrapped business under $1M it takes three to five months end to end, and the preparation stage is where most of the value is won or lost.

How much is my SaaS business worth?

Under $1M ARR, most businesses sell at 2.5x to 4x SDE — net profit plus your own salary and owner-specific costs — which usually works out to 1x–3x ARR. A business with $70,000 in owner earnings typically falls between $175,000 and $280,000. Growth, churn and founder dependency move you within that range far more than revenue does.

How long does it take to sell a SaaS business?

Three to five months from decision to funds for a prepared business, plus a 30–90 day handover. Roughly: 2–6 weeks preparation, 1–2 weeks materials, 2–8 weeks on market, 1–3 weeks negotiating, 2–4 weeks diligence, 1–2 weeks to close. Unprepared businesses take substantially longer, mostly in cleanup that could have happened before listing.

What fees do I pay when selling my SaaS business?

A success fee to whoever brokers the sale, an escrow fee for holding funds, legal costs of roughly $1,500–$5,000 for the purchase agreement at this size, and then tax. The headline price and what reaches your account differ by more than most founders expect — on a $250,000 sale, cash at close is typically closer to $197,000 before tax, with a holdback released months later.

Should I use a broker or sell directly?

Direct works if you already know a credible buyer and are confident about price, but a single bidder means no competitive tension, which usually costs more than a success fee. Below roughly $150K a self-serve marketplace often makes sense. Between $100K and $2M a curated marketplace or broker generally pays for itself through buyer quality and by preventing the deal from collapsing in diligence.

Can I sell a SaaS business that isn't profitable?

Yes, but you'll be valued on revenue rather than profit, typically 0.5x–1.5x ARR, and the buyer pool is much smaller. Unprofitable businesses sell best when growth is strong and the path to profitability is obvious — for example when losses come from paid acquisition a buyer could simply switch off.

What documents do I need to sell my SaaS business?

Monthly P&L for 24–36 months with itemised add-backs, a payment processor export covering the same period, MRR movement and cohort retention, customer concentration, analytics access, a cost breakdown including inference, contractor IP assignments, a third-party dependency list, an open-source licence audit, domain and account inventory, customer terms, and SOPs. The full checklist is above.

Do I have to tell my customers I'm selling?

Not during the process, and generally you shouldn't — which is why marketplace listings are anonymised and buyers sign NDAs before seeing details. Customer communication happens at or after close, usually as a handover note from you introducing the new owner. Agree the wording and timing with the buyer before signing.

What is an earnout and should I accept one?

An earnout makes part of the price contingent on the business hitting targets after you've stopped controlling it. They're common and not inherently bad, but treat any earnout as a bonus rather than as price. Compare competing offers on cash at close alone — a higher headline with a large earnout is frequently the weaker deal.

How long do I have to stay involved after selling?

Typically 30 to 90 days of transition support at this size, occasionally longer for a technically complex product. Agree the specific hours per week in writing rather than accepting "reasonable support," which means whatever the buyer later decides it means. Non-compete terms are separate, standard, and negotiable on scope and duration.

Thinking about it? Get a free valuation in about 60 seconds to see where you stand, or start a listing when you're ready.

Sources: Aventis Advisors (459 disclosed private transactions); FE International 2026 multiples; Empire Flippers (average days on market, diligence windows); Software Equity Group 2025 buyer survey; ChartMogul SaaS Retention Report (~3,500 companies, data through September 2025); a16z via Avante Ventures (AI gross margins).