Tim Schumacher, co-founder of saas.group, explores some key considerations for founders when starting to think about exiting.
For many founders, the big question will be when should I start planning for exit? While there can be no right or wrong answer, the reality is that the most successful exits are usually built years earlier. This means, even if you are nowhere close to thinking about selling up anytime soon, it could probably pay to start planning for it ahead of time.
For SaaS founders, of course, this becomes even more pertinent. SaaS has traditionally attracted strong investor interest thanks to its recurring revenue model and high growth potential. This enthusiasm often translated into premium valuations and often with limited scrutiny on operational efficiency, product differentiation or long-term value creation. That landscape is now shifting. Advances in AI are reshaping how businesses build, manage, and derive value from software with many companies moving away from costly SaaS subscriptions in favour of AI-driven solutions. As a result, it is more important than ever for founders to ensure all their “ducks are in a row” well ahead of an exit. Those who do will be best positioned to stand out as truly differentiated, high-value businesses, as increasingly discerning investors place greater emphasis on substance over hype.
The good news is that there are some simple measures founders can take when it comes to starting – even in the premature stages – to prepare for eventual exit. Based on our experience at saas.group, going from the first acquisition chat to an actual deal may take up to several years. Building with an exit in mind may not be something founders often do. But when they start to consider one, it’s usually a mix of personal, financial, and strategic factors.
The stages of a SaaS business
SaaS businesses typically progress through four stages – startup, growth, maturity and sometimes decline – each bringing distinct challenges and skill requirements. In the startup phase, the focus is on creativity, product development and achieving product–market fit, with some companies exiting early more out of opportunism than long-term sustainability, often driven by private equity bets on rapid growth. The growth stage shifts to scaling operations, building teams, and introducing structure, making it a potentially ideal -if emotionally difficult – time to sell. At maturity, the emphasis moves to maximising profitability and maintaining steady performance, though businesses risk plateauing without renewed innovation. If decline or stagnation sets in, founders may look to sell, but doing so at this stage often leads to weaker outcomes due to reduced leverage and fewer interested buyers.
Personal priorities
When it comes to exit success, it’s easy to assume most founders are primarily focused on securing the biggest possible deal. In our experience, however, that is often not the case. Alignment with a founder’s personal goals and priorities can be just as important – if not more – than valuation alone.
In planning an exit, founders should therefore think beyond financial outcomes and consider what they want life to look like afterwards. While team, brand, and legacy matter, the emotional weight of stepping away from a business built over many years is often significant, even when an acquirer offers continued involvement in a new role. It’s also important to be clear on what comes next – whether that’s another venture, a break, or a shift in direction -rather than leaving the future undefined.
Commercial considerations
Aside from personal goals, several business-specific factors impact your readiness to exit. First up, it’s important to know your worth. Online calculators are a decent start, but consult an M&A broker or advisor for a realistic valuation. Look for social posts and articles. Some founders are very open about their exits. Just remember that no two exits are the same, and you’ll need to be prepared for deep due diligence.
Financial health is critical too. Keep clean, organised records of revenue, expenses, and growth trends. This makes due diligence far easier. At saas.group, we try to streamline this process and give rough valuations early, but that only works if founders know their numbers and can share them confidently.Operational independence is a key consideration here too. Can your business thrive without you? The more your business runs without your day-to-day involvement, the more attractive it is. Making yourself “redundant” may feel strange, but it’s exactly what buyers want. After all, you’ll be moving on eventually.
Timing also matters, as favourable market conditions and recent comparable exits can meaningfully influence valuation, while understanding broader industry trends helps inform the right moment to sell. Finally, growth trajectory is key. Buyers prioritise momentum, so founders should aim to strengthen or revive growth before an exit, as selling at peak performance typically leads to the strongest outcomes.
An exit edge
It is often said that if you fail to prepare you prepare to fail. In the context of the shifting SaaS landscape this becomes even more profound, as buyers become more selective and the difference between prepared and reactive founders will only grow. With this, it becomes even more important for founders – even those who might not be contemplating selling in the foreseeable – to think about their exit readiness ahead of time and stay clear on both personal and commercial goals to ensure they have the edge when the opportunity arises.
