How To Buy a SaaS Company To Grow MRR (Using The Bolt-On Acquisition Strategy)

About this video

Dan Martell explains how to buy a SaaS company to ‘bolt on MRR’ through acquisitions, saying you first learn to build, then learn to buy, without risking the whole business. He says he buys for technology/teams (acqui-hire) or for revenue, to upsell and cross-sell existing customers, improve economics, and bundle MRR for a higher valuation multiple. He cites coaching founders he names, including Kevin at SureSwift, who he says has bought about 40 SaaS companies in five years. His five steps are: 1) Map the landscape — list every software company in your space and ask customers what other tools they buy before/after yours; build a pipeline rather than reacting to one deal. 2) Go in asking — directly ask if a founder is interested in exiting or a strategic acquisition, because money is only one of many reasons to sell. 3) Buy the due diligence — hire tech, financial, and team diligence to score code, churn, monetization, and people. 4) Acquisition financing — if the target is profitable with positive EBITDA, lenders may finance most of it with 20-25% down, plus seller financing where a seller holds paper over e.g. five years. 5) Plan post-sale — have a day-one hit list for integrating engineering, customer success, sales, and product upsell/cross-sell. He offers his LOI and due diligence checklist templates co-created with Kevin.

Key takeaways

• Bolt-on acquisitions buy tech/teams or revenue to upsell existing customers
• Map every competitor in your space and build an acquisition pipeline
• Go in asking directly — a no saves time, and sellers have non-money motives
• Buy tech, financial, and team due diligence instead of guessing on risk
• Profitable targets can be largely debt- or seller-financed if cash flow supports it

Episode details: published May 31, 2021 · 11:32 long. Summary written by Self Growth Videos from the episode itself. Business results and any income figures mentioned are Dan Martell’s own claims, shared for education — they are not typical or guaranteed.

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