How to Sell Your Micro SaaS: A Complete Acquisition Guide

Selling a micro SaaS business you've built from scratch is one of the most significant financial decisions you'll make as a founder. Whether you're ready to move on to new projects, need liquidity, or simply want to see your creation thrive under new ownership, understanding the acquisition process is essential.

This guide covers everything we've learned from evaluating hundreds of micro SaaS businesses and completing acquisitions in the $1k-$5k MRR range.

Understanding Micro SaaS Valuations in 2025

Micro SaaS businesses typically sell for 2.5x to 4.5x annual recurring revenue (ARR), though exceptional businesses can command higher multiples. Several factors influence where your business falls on this spectrum:

Factors That Increase Valuation

• Low churn rate: Monthly churn under 3% signals strong product-market fit
• Organic growth: Businesses growing without paid acquisition are more valuable
• High net revenue retention: Expansion revenue from existing customers
• Minimal owner dependence: Businesses that run without daily founder involvement
• Clean codebase: Modern tech stack with documentation
• Diverse customer base: No single customer representing more than 10% of revenue

Factors That Decrease Valuation

• High churn: Monthly churn above 5% raises red flags
• Declining MRR: Negative growth trends are concerning
• Customer concentration: Heavy reliance on a few large customers
• Technical debt: Legacy code that requires significant updates
• Unclear financials: Mixed personal and business expenses

Preparing Your Business for Sale

The best time to prepare for a sale is long before you're ready to sell. Here's what smart founders do:

Financial Documentation

Buyers will want to verify your numbers. Prepare:

• Monthly MRR reports for the past 24 months
• Churn analysis by cohort
• Customer acquisition cost (CAC) breakdown
• Profit and loss statements
• Bank statements matching reported revenue

Technical Documentation

Make the transition smooth by documenting:

• System architecture overview
• Deployment processes
• Third-party service dependencies
• Known issues and technical debt
• Standard operating procedures

Customer Relationships

Document your customer success processes:

• Onboarding workflows
• Support ticket categories and volumes
• Key customer contacts and relationships
• Feature requests and roadmap

The Acquisition Process

Understanding what to expect helps reduce anxiety and speeds up the process.

Stage 1: Initial Conversation

Most buyers start with an informal conversation. We'll ask about your business basics: MRR, churn, customer count, and why you're considering a sale. This stage typically takes 1-2 calls and requires no documentation or NDAs.

Stage 2: Letter of Intent (LOI)

If there's mutual interest, the buyer presents a Letter of Intent outlining proposed terms. This includes purchase price, deal structure, transition period, and any contingencies. LOIs are typically non-binding but signal serious intent.

Stage 3: Due Diligence

This is where buyers verify everything. Expect requests for:

• Full financial records
• Customer lists and contracts
• Codebase access
• Vendor agreements
• Team information (if applicable)

Due diligence typically takes 2-4 weeks for micro SaaS businesses.

Stage 4: Closing

Legal documents are prepared, funds are transferred, and ownership changes hands. This includes asset purchase agreements, transition plans, and any seller financing arrangements.

Common Deal Structures

Micro SaaS acquisitions rarely involve simple all-cash transactions. Understanding deal structures helps you evaluate offers:

All Cash at Close

The simplest structure. You receive the full purchase price at closing. Less common for larger deals, but possible for well-documented businesses with strong metrics.

Seller Financing

A portion of the purchase price is paid over time, typically 12-24 months. This reduces buyer risk and can result in a higher total purchase price. Interest rates typically range from 5-10%.

Earnouts

Additional payments tied to post-acquisition performance. Common structures include hitting MRR targets or retaining key customers. Earnouts can be lucrative but add complexity.

Red Flags to Watch For

Not all buyers are created equal. Watch for these warning signs:

• Excessive NDAs before any discussion: Legitimate buyers don't need NDAs for initial conversations
• Requests for customer contact details early: This should come during due diligence, not before LOI
• Pressure tactics: "This offer expires in 24 hours" is rarely legitimate
• Vague deal terms: Serious buyers provide specific, written terms
• No references: Ask to speak with founders who've sold to them before

Maximizing Your Outcome

A few strategies can significantly improve your acquisition experience:

Start Preparing Early

The best time to prepare for a sale is 6-12 months before you're ready. Clean up financials, document processes, and address obvious issues.

Be Honest About Weaknesses

Every business has issues. Addressing them upfront builds trust and speeds up due diligence. Surprises discovered during due diligence often kill deals.

Consider Your Transition Capacity

Most buyers want some transition support. Be realistic about how much time you can commit post-sale, and negotiate accordingly.

Get Professional Help When Needed

For larger deals, consider engaging a lawyer familiar with SaaS acquisitions. The cost is usually worth the protection and peace of mind.