Dear SaaStr: What Are The Best Strategies for Raising Capital if Your Goal is To Get Acquired?

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SaaStr 3d ago

Dear SaaStr: What Are The Best Strategies for Raising Capital if Your Goal is To Get Acquired? - SaaStr

Quick Summary:

And … most investors are only going to be happy if they make at least 3-5x on a deal. 2x, worst case.

In acquisitions, usually, the acquirer wants to buy either the category winner (which get a huge premium), or at least, a potential category winner (might be #2 today, but could be #1, it’s growing faster, better tech, etc.). The #3 player in the space usually gets bought for peanuts.

That’s a pretty nuanced play. But. It has worked time and time again.A $1.5b market cap company will go shopping for $50m tuck-in acquisitions. And they’ll often quietly rule out anyone that’s raised too much more than $5-$10m in funding, unless it’s a fire-sale situation.