Acquisitions Anonymous - #1 for business buying, selling and operating This SaaS Does $200M in Transactions—Should You Buy It?
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Apr 1, 2025 
Travis Jamison, an expert in small business investing and contributor to CapitalPad, joins the discussion about a niche SaaS billing platform valued at $7M. They explore the intriguing financial metrics, including $2M in EBITDA, and debate whether its reliance on payment processors is a risk. Travis shares insights from his 15+ business acquisitions, focusing on customer retention strategies and the importance of rigorous technical due diligence. The conversation also touches on selective investment philosophies and the challenges in financing potentially waning technology.
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Low Valuation Due to Lack of Moat
- This SaaS business, priced at $7M, seems cheap with 85% margins and a 3.3x multiple.
- Its low price likely stems from its vulnerability as a "wrapper" around Stripe, lacking a strong moat.
Focus on Net Churn
- Evaluate the company's net churn (customer and revenue) to assess long-term viability.
- This helps understand the balance between customer acquisition and loss.
SBA Pre-qualification Is Misleading
- "SBA pre-qualified" on listings is often a misleading marketing tactic by brokers.
- Banks don't thoroughly vet deals pre-sale; actual qualification happens later.