After You’ve Signed the SaaS Acquisition Deal: Next Steps for Founders

We’ve previously discussed deciding when to sell your SaaS business, which avenues to sell through, and how to navigate the various acquisition deal structures. But what do you do once the ink is dry on your SaaS acquisition deal?

In today’s article, we’ll explain what Founders can expect during the acquisition transition period and beyond. We’ll break down which paths a Founder might take once their business has been acquired, as well as the opportunities that will be available to them post-acquisition. We’ll also detail the different paths that Founders of SureSwift acquisitions often take. 

Let’s get started!

Understanding your role, post-acquisition

While it might feel like the bulk of your responsibility lies with finding and selling your SaaS company, that may be just the start of a new chapter in your life as a Founder. Once the deal is done, you're left with new decisions over your role, involvement, and future steps. Some Founders choose to transition out entirely, handing over the reins to the new ownership. Others may prefer a more gradual exit, staying on for a limited time to guarantee a smooth transition. Then there are those who remain long-term, helping to further scale the business under new management. Here are three primary outcomes for Founders whose business has been acquired. 

The Clean Break: No Strings Attached

Some buyers want to acquire the business and the business alone. This may be an ideal path for you if you’re experiencing Founder’s Fatigue or simply feeling ready to move on to your next venture. By choosing to make a clean break, you walk away with a clear head, a new sense of freedom, and the space to start whatever’s next on your list, whether that’s a new project or some well-deserved time off. This outcome can also simplify the deal itself – no worrying about earnouts or navigating your role in a new company structure.

There are a few downsides to this choice, however. A clean break means leaving behind the chance to shape the next chapter of your business. You won’t be there to help guide the transition, and if you have a lot of loyal team members or customers, that might weigh on you. Plus, if the new owners don’t quite follow your vision, it can be difficult to watch from the sidelines. It’s important to decide whether you’re ready to hand over the reins completely or if you’ve still got more to give before hanging up your Founder hat on this venture. 

Deciding to move on from a business you’ve built from the ground up is never easy, but sometimes, it’s the right call. If you’ve made it to the point where you’re ready to move on, no strings attached, then the important thing is to set your acquirers up for success. Here are a few exit steps to ensure due diligence and a strong handoff to the new owners:

1. Clean up your business records. 

Make sure to separate any business accounts from personal accounts, including bank accounts, email addresses, and general communications. Organize past financial records, so you can guarantee the new owners full access to the historical data they need.

2. Shore up compliance and security. 

Are your passwords all kept securely in a centralized storage system like 1Password or NordPass? Do you know exactly which types of customer data your business collects and how it gets stored? Make sure to address any loose ends regarding company data soon as possible, so you can pass sensitive information to the new owners with confidence.

3. Manage technical debt. 

Too much tech debt will sink a SaaS business before it even gets acquired. If you’re in the process of making an exit with the hopes of a clean break, do everything you can to reduce technical debt; it’ll be a major leg up for you and your acquirers. Run code reviews with your dev team, adopt an automated testing tool like Ghost Inspector for simplified app testing, and document as much as you can, so the new team isn’t left with a confusing tech mystery on their hands. While it’s normal and financially sound to pass on some tech debt, if you leave the new owners with an absolute mess of code, you’re handing down a huge, time-consuming headache as your legacy.

Making a clean transition allows you to walk away with confidence, knowing the business is in good hands. It’s also a good time to review the lessons learned from running your business and from the acquisition experience as a whole, so you can plan for what’s to come. A great exit isn’t solely about the deal; it’s also about establishing a reputation that helps set you up for the future. 

Supporting through the Transition

If you’re seeking a happy medium between continuing on full-time and making a clean break, many acquirers hope that a Founder will stay through the transition period to provide key support as needed. Buyers may include an earn-out option in your contract when they’re looking for this type of support. With earn-outs, your buyer will pay part of the acquisition price upfront in cash, with the remainder contingent on achieving specific performance targets. These targets often include revenue growth, decreasing churn, or increasing operational earnings. It’s important to note that there is a degree of risk involved in accepting a contract with an earn-out, as payment only occurs when specific goals are reached. If you run short of those goals, you forfeit the pay increase. 

Many buyers want a Founder to stay on through the transition, as their expertise and knowledge about the acquired company is invaluable to the new owners. Founders can provide key insights into the future, help with operational troubleshooting, and facilitate a smooth transfer of ownership. They also carry with them an innate understanding of their clientele, which can make a great difference in customer retention in the long run. Buyers know, when a Founder assists with the transition, even for a short period, the company is likely to find its footing under the new ownership more quickly.

The amount of support you offer during the transition might range from the need for a few hours a week to the expectation that you’re always available for questions. It’s important to clarify these details with the buyer before signing your contract to ensure that both parties have a clear understanding of the terms. 

Staying On as an Employee

Many acquirers will entice a Founder to stay on full-time by using different “carrots,” like milestone payments or additional company equity, to incentivize them to remain. These offers can be lucrative and may prompt you to reconsider whether it’s time to move on or whether staying with the company for a few years could be worthwhile. 

When Ghost Inspector was first acquired by Runscope in 2014, bootstrapped SaaS Founder Justin Klemm made the decision to stay with the company for 18 months, which led to him eventually buying Ghost Inspector back at 20x its original value. In 2022, he sold the company again, this time to SureSwift, capitalizing on its greater success for an even stronger acquisition. Following the sale, he opted to take time off to travel, explore new passions, and focus on his family. By accepting the initial position with Runscope, Justin stayed invested in Ghost Inspector, allowing him to continue his legacy with the company and expand it to greater heights before fully transitioning out. 

The decision of whether to stay with your business after its acquisition is a personal one. In the end, it depends on what you want from the next phase of your career. By staying with your SaaS business, you’ll help complete a smooth transition while continuing to facilitate the vision you’ve worked for years to build. Staying affords you the opportunity to guide the team through major changes, help retain important clients, and carry over some of the prior company culture. Plus, it can be a smart way to keep some skin in the game if you’re still invested in the long-term potential of the business, like Justin was. 

On the opposite end, remaining with the company post-acquisition might not be the right fit. It may require you to adjust to a new position or a different pace, which can be challenging if you’re used to being your own boss and running your business the way you prefer. Still, if you’re passionate about the company and ready to weather a potential operational overhaul, staying on under new ownership can be a wise move.

After the Transition: What happens next? 

You've completed the transition and made the decision to step away from the business entirely. That leaves you with one question: what now? Many Founders suddenly find themselves with more time – and energy – on their hands than they’ve had in years. 

So what should you consider for this next period of your career? Founders often choose one of these four paths after signing an acquisition deal for their SaaS business. 

1. Take a break.

If you feel like you’ve been pushing yourself to your limit, now might be the time to take a break from the Founder grind. Not only will it help prevent burnout in the long run, but studies have shown that resting between milestones has a strong, positive impact on your levels of creativity, productivity, and well-being. By taking a strategic break to rest, recharge, and allow your mind to process your previous year (or several years), you set yourself up to head into the next phase of your career with renewed energy and inspiration.

2. Enjoy early retirement.

Some Founders make the choice to retire once their SaaS business has been acquired. With an early retirement, you can pursue passions, do volunteer work, travel, and enjoy more time with family. This decision comes with a few caveats, however. For one thing, early retirement requires fairly shrewd financial planning. Without a steady income, you'll need to make sure that your funds are properly managed to sustain your lifestyle for the long term, including unexpected expenses. Sometimes, Founders find that the retirement life isn’t for them. For many, the lack of structure can lead to boredom, a loss of purpose, and even unhealthy coping mechanisms to deal with overwhelming feelings of aimlessness. It’s important to consider whether you’ll truly be happy in retirement, or whether an extended break will suffice.

3. Start a new venture.

There are plenty of Founders who make the choice to jump from one acquisition right into the next. Perhaps you’re feeling the momentum from a successful exit, and you want to keep pressing forward. The choice to undertake another enterprise has been a popular one for a number of SureSwift acquisition founders, including MeetEdgar’s Laura Roeder and Vitay’s Poya Farighi. Roeder’s following venture, an all-in-one coaching management platform called Paperbell, boasts over $24 million in user profits. Farighi’s next pursuit, a B2B SaaS business for hospitality recruitment called Gateway, now serves clients from Dubai’s top hospitality companies, providing them with a comprehensive solution for hiring, training, and managing employees. 

Both Roeder and Farighi took what they learned after a successful exit from their first B2B SaaS business and leveraged it into the next part of their careers – though Roeder also chose to take a short break between endeavors. If you’re feeling the pressure to move ahead right away, it may still be the wisest choice to take a break before forging on. Remember, even a short period of leisure goes a long way in replenishing energy and creativity.

4. Become an angel investor.

Founders who've made a successful exit may uncover the next chapter of their career within the world of angel investing. An alternative to venture capital, angel investors typically invest personal funds into early-stage startups and exciting business ventures. After his business, Genologics, was acquired, SureSwift Capital CEO James DeGreef stepped into the world of angel investing, getting involved with local tech startups in the Victoria, BC area.

As a Founder, you’ve navigated the highs and lows of building a business and guiding it to a successful acquisition, placing you in a unique position where you can not only invest but also offer valuable wisdom and mentorship. For a young company, your wealth of experience will carry influence, since you’ve been where they are now and can offer real insight into their specific needs. Overall, angel investing can be a rewarding way to diversify your portfolio, grow your business network, and build a new skill set – without having to dedicate CEO-level hours to a business. Although, like James, you might find yourself missing the day-to-day challenges of running a startup and end up back in CEO territory again before too long. 

Transitioning with SureSwift Capital

With over 40 acquisitions under our belts, the team at SureSwift Capital understands the unique priorities and concerns that Founders carry while transitioning to the next stage of their careers. We also believe in flexibility when it comes to determining a Founder’s next steps after we’ve acquired their business. 

Ultimately, we want our Founders to choose the option that will best help their business to thrive, whether that's bringing them into the SureSwift team as the business’s leader or simply as a transitional leader over a determined period of time. We always seek to give Founders the freedom to choose the extent of their role post-acquisition. And by fostering long-term relationships with our Founders, we aim to stay connected even after they’ve moved on. Our best-case scenario: we acquire your next business when you’re ready to sell once again. 

Whether you choose to continue on with your acquired business, make a clean break and retire, or any combination of the scenarios mentioned above, remember that the choice should ultimately reflect what feels right for you and your next chapter. 

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If you’re the Founder of a B2B SaaS company and you’re interested in getting to know the SureSwift team, you can start a conversation with us here. We’re excited to learn more about your business!  

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