Is an unsolicited offer for my SaaS usually low?

Usually it is an opening number, priced by someone who has seen more deals than you have. It is often inside a defensible range and structured in the buyer's favour.

Should I tell the buyer my price first?

Not before you have a defensible range and know your own red flags. Once you name a number it becomes the ceiling of the conversation.

What is a normal earn-out at this size?

Anything from zero to half the headline number. Treat only the cash at close as the price, and treat the rest as conditional on decisions you will no longer control.

Is this acquisition offer fair? How to check before you reply

First: do not reply today

An unsolicited offer is a good sign and a weak position. The buyer has run the arithmetic, you have not, and the first number you say out loud becomes the ceiling. Nothing is lost by taking two days.

Check 1 — the headline against a real range

Compute what the business is worth on its own metrics before you look at their number again. If the offer is inside the range, the negotiation is about structure. If it is below, you need to know which of the five adjustments they are pricing — usually churn or customer concentration, and usually correctly.

Check 2 — cash at close

The headline number is the least reliable part of an offer. Ask for the split: cash at close, seller note, earn-out. An earn-out tied to revenue you no longer control is not part of the price, it is a lottery ticket, and at this size a meaningful share of earn-outs never pay in full.

01How much is wired on closing day?
02What is held back, for how long, and what releases it?
03What happens to the earn-out if the buyer changes pricing, the product or the acquisition channel?
04Is there a transition period, how long, and is it paid?
05Who pays the transaction fees, and is the price gross or net of them?

Check 3 — what they will find in diligence

Every offer is provisional until diligence. The re-trade — a lower number after the buyer finds something — is the standard play, and it works because the seller has stopped talking to anyone else by then. Know your own red flags first. A concentrated customer, for example, is worth about $66,000 on a business like the example on this site, and a buyer who finds it in week three will ask for more than that.

Check 4 — who the buyer is

An operator buying their first business, a portfolio acquirer buying their fifteenth and a competitor buying your customers pay differently for the same asset. Ask directly what they have bought before and how they financed it. A buyer who will not answer that is not close to closing.

Check 5 — the second buyer

One offer is a valuation. Two offers are a market. You do not need an auction, and manufactured urgency is a tactic we reject, but a single buyer who knows they are the only buyer prices accordingly.