Industry deep-dive
How to Buy a SaaS Business
By Michael Freedman, Florida licensed business broker · Reviewed October 22, 2026Software subscriptions with the best revenue quality in small business: recurring, high-margin, and scalable.
Why buyers like this industry
- Monthly and annual subscriptions are the gold standard of recurring revenue.
- Gross margins above 80 percent are typical.
- A product with low churn grows even with modest sales effort.
- Deep buyer demand from individuals, funds, and strategic acquirers.
What drives value in this category
- Net revenue retention and churn by cohort
- Growth rate and its sources
- Technical debt and codebase health
- Customer concentration
- Founder dependence in product and support
Red flags to check
- Churn is masked by annual plans sold at heavy discounts.
- One developer holds the entire codebase.
- Growth comes entirely from paid ads.
- The product depends on one integration or platform API.
Who this suits
Buyers with software, product, or growth backgrounds who can verify the code and the cohort data.
Michael Freedman
Florida licensed business broker. 14+ years buying and selling businesses, 1,000+ evaluated, $100M+ in deals closed and advised on.
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