How to negotiate and close deals?

• Wire Details:
• If the amount is below or around $500k: I recommend going with a simple asset transfer and a simplified payout deal: 50% upfront, and 50% after the transition period. There’s typically a simple invoicing to be put into place for this.
• If the amount is higher: Get a lawyer and set up an escrow (or assimilated) account, with clear milestones in place. Best for a legal team to put the contracts together in this scenario.

• Letter of Intent (LOI): Draft and negotiate the LOI, outlining the key terms and conditions of the acquisition. You can steal mine at the end of this page or, for a more sophisticated one, visit this page: https://blog.acquire.com/letter-of-intent-builder/.

• Purchase Agreement: Work with legal advisors to draft a comprehensive purchase agreement. Ensure all terms, representations, and contingencies are included.

• Financing and Funding: Secure the necessary financing through loans, equity, or other sources.

• Closing the Deal: Sign the purchase agreement and complete the acquisition transaction. Transfer ownership and financial assets as specified in the agreement.

• Deal Structuring: Keep in mind that the complexity of the contract must be coherent based on the acquisition size. For small acquisitions, sending a simple contract via email is enough.

A few things you can do to lower your risk:

• Agree on revenue share to lower the initial cost

• When buying a “traffic product”, partner first with a good tracking system or set up an affiliate link, and if the results are good, go ahead with making an acquisition offer.

• Get financing from a bank or a company like https://boopos.com (great for SaaS acquisitions)

• Add conditions such as “a 2nd payment will be done after 6 months if churn has been lower than X”.

Deal Structuring And Terms

• It shows you're not trying to rip off the maker and helps them trust you.

• It’s best to cover all the terms and conditions in the contract upfront so there is no scope left for miscommunication.

• Further due diligence can be done once the maker agrees to take up your offer.

An example of how I send an acquisition offer

Tips For Your Post-Acquisition Phase

• Integration and Synergy: Execute the technology, staffing, and customer transition plan. Foster collaboration and synergy between teams and products.

• Monitoring and Optimization: Continuously monitor the performance of the acquired SaaS company. Track key performance indicators (KPIs) and adjust your strategy as needed.

• Customer Retention and Growth: Focus on retaining and expanding the customer base. Optimize marketing and sales strategies.

• Legal and Compliance Transition: Address any legal and compliance issues resulting from the acquisition

• Final Steps: Fix and stabilize the product to be Production Ready. Get into a growth trajectory ASAP before just adding features. Then, focus on small incremental feat.