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December 21, 2021

Considering an Exit? Here's What You Should Know

GUEST: Lowell Ricklefs, Founder and Managing Partner at Traction Advising M&A

 
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One day, you wake up, look in the mirror and notice the bags under your eyes have bags under their eyes — wait, did your eye-bags always have eyes? 

Now, you're walking around muttering "the bags have eyes" to your increasingly worried cat. Or maybe you've just developed an overwhelming urge to play a few hands of canasta on a beach in Aruba. 

Whatever the reason, when it comes to an exit strategy for your SaaS business, you better have a solid understanding of how M&As work.

Today's guest, Lowell Ricklefs, Founder and Managing Partner at Traction Advising M&A, has all the information you need to get the most out of your exit.

In this episode, we'll tackle:

  • What makes SaaS M&As different
  • The importance of growth and revenue to any M&A proceeding
  • The difference between strategic and financial buyers

Knowledge and passion

He's a seasoned world traveler who takes the anti-tourist path, immersing himself in the local culture. A guest lecturer across Europe and a volunteer mentor in Uganda, Lowell's driven to help others learn to succeed. 

With a degree in computer engineering, he made his way into technical sales, a VP slot and then the C-suite. He's founded and sold a mind-boggling number of SaaS and fintech enterprises. 

Along the way, he realized traditional M&A bankers just didn't get it when it came to dealing with technology products — and thus Traction Advising was born. 

"Has anyone ever hired a finance person to sell their technology product?"

Lowell Ricklefs, Founder and Managing Partner at Traction Advising M&A

Staging your SaaS

Anyone selling their house knows staging is crucial if you want to get top dollar. But it's going to take more than a fresh coat of paint and some neutral furniture to put your SaaS company in the best light.

Lowell suggests starting with:

  • Knowing your ultimate goal
  • Getting your back office in order
  • Ensuring your valuation is in alignment with reality

People pay a premium for SaaS companies because they think it's a cash cow, a reliable rev stream that can only scale up. If the growth isn't there, well, "no one wants to catch a falling knife."

"Retention and growth are really the two biggest drivers of value."

Lowell Ricklefs, Founder and Managing Partner at Traction Advising M&A

Beware of buyers

There are three categories of buyers:

  1. Strategic
  2. Financial
  3. Private equity

Knowing which one is the target buyer for your SaaS business will play a huge part in a successful M&A. 

Now that you have a solid exit strategy, are you ready to learn how to infuse data literacy into your team, or how to build trust and confidence with your content strategy? Check out the full list of episodes: The B2B Revenue Executive Experience.