Watch Episode
Episode Show Notes
In this episode of the SaaS Buyers Club, host Omeed of Optimist Legal sits down with Okan, Head of SaaS at ComCap, to demystify the modern exit landscape for software founders. Okan challenges the “linear” Silicon Valley myth that success only comes via the VC-to-IPO pipeline, highlighting instead the lucrative paths of bootstrapping, private equity (PE), and strategic acquisitions. The discussion dives deep into the increasing sophistication of modern buyers, who now demand granular KPI packages and a “Rule of 40” performance. Okan provides a compelling defense for using investment bankers to level the playing field against experienced corporate development teams, emphasizing that a successful exit is as much about human psychology and storytelling as it is about valuation multiples.
Episode Transcript
Beyond the IPO: Navigating the New Era of SaaS M&A
For a long time, the “Startup Dream” was sold as a straight line: raise a seed round, hit Series A through C, and ring the bell at the Nasdaq. But according to Okan, Head of SaaS at ComCap, that path is not only rare—it’s just one of many ways to win.
In a recent deep dive on the SaaS Buyers Club, Okan Inaltay shared how the market for SaaS exits has matured, why $10 million ARR is the new “magic number” for scale, and how founders can maximize their exit value by understanding the “human element” of a deal.
The Multi-Path Approach to Success
Many founders believe that raising venture capital is the only way to reach a multi-million dollar exit. However, the reality of the modern market is far more diverse. Founders are increasingly finding success through:
Bootstrapping: Retaining 100% equity and using debt or ARR-based financing to grow.
Private Equity (PE): Selling to a PE firm that uses the company as a “platform” for further acquisitions.
Strategic Sales: Selling to a larger competitor where $1 + 1 = 3$ through revenue synergies.
The key takeaway? Your path determines your waterfall analysis—the calculation of how much money actually hits your bank account versus your investors’ at the end of the day.
The Sophisticated Buyer: What They Really Want
Ten years ago, you might have sold a SaaS company on the strength of the product alone. Today, buyers are far more rigorous. They aren’t just looking at your code; they are looking for a SaaS KPI Package in the data room.
If you want to command a premium multiple, you must demonstrate a mastery of the Rule of 40, a balance of growth and profitability where the sum of your growth rate and profit margin exceeds 40%.
Beyond just growth, buyers look for:
ICP and Retention: A deep understanding of your Ideal Customer Profile and net revenue retention (NRR) that sits in the top quartile of SaaS industry benchmarks.
The $10M ARR Milestone: While $5M ARR is a great start, $10M is where “scale premiums” kick in, opening doors to institutional and private equity buyers.
The “Banker vs. No-Banker” Debate
A common point of contention among founders is whether an investment banker is necessary. Some argue that a lawyer and a founder can handle the deal themselves. Okan argues that this often leaves significant money on the table.
Large acquirers have experienced Corporate Development teams—professionals whose entire job is to buy companies at the best possible price. An investment banker acts as an essential counterweight by providing:
The “Bad Cop” Role: Protecting the founder’s relationship with the buyer by handling tough negotiations.
Storytelling: Framing the business’s future potential, not just its historical performance.
Process Management: Creating a competitive environment with multiple bidders to drive up the multiple.
Timing: 12 Months to a Premium Exit
While a deal can occasionally close in 40 days if an inbound offer is already on the table, a proactive exit usually takes 9 to 12 months. Okan recommends building relationships with bankers and advisors 12 to 18 months in advance.
Crucial Advice: Avoid major product launches or strategy shifts in the middle of a deal. M&A is built on momentum. If you launch a new product mid-process and it underperforms, it can “poison the well” for the entire transaction.
The Human Element of the Deal
At the end of the day, M&A is a human process. It’s a “rollercoaster ride” of emotions, personality clashes, and compromises. Success requires a team of advisors—lawyers, bankers, and accountants—who can act as psychologists and confidants as much as financial experts. When the deal finally closes, it’s about more than the numbers; it’s about securing the life-changing exit you’ve worked years to achieve.