What to Expect When Selling Your Software Business: A Path to a Thoughtful Exit
If you’re a Founder of a vertical market software business, chances are you’ve poured years into building something that lasts. When it comes time to consider selling, the stakes can feel personal.
At Perseus, we’ve built our M&A process around the realities Founder’s face: time constraints, legacy concerns, and a desire for continuity. Our process is designed to be rigorous but respectful. Below is a look at how we typically navigate acquisitions, and the timelines you can expect.
1. Initial Discussions
Relationship Building
Our acquisitions stem from relationships that are often built over years. Since we have life-long commitment to the businesses that join us, we want to ensure the fit is right for both parties.
In the tech M&A sector, 70% of failed acquisitions cite “cultural misalignment” as a key factor (PwC Global M&A Industry Trends 2023). We prioritize early alignment, long before due diligence begins.
2. Preliminary Analysis
2–3 Weeks
Before requesting information, we’ll sign a mutual NDA to ensure your privacy is protected through the process. After the NDA is signed, we request information that helps us understand your business at a deeper level.
By the end of this phase, we’ll provide an indicative valuation and hope to confirm mutual interest in order to move forward to the next step. We look for businesses with domain expertise, recurring revenue, and a strong leadership team that we’ll support over the long-haul.
3. Letter of Intent (LOI)
3–4 Weeks
If we are aligned on valuation, we will work together towards an LOI. This is a non-binding document that outlines key terms such as price, structure, and timeline.
At this stage, many founders ask: “What does it mean to sell to a buy-and-hold acquirer?”. Simply put, selling to a buy-and-hold acquirer means continuity and future protection for your business at all levels. Unlike Private Equity, we will not compromise the short-term integrity of the business to optimize for earnings. Every decision we make is with a long-term view in mind.
4. Confirmatory Due Diligence
8–12 Weeks
Our M&A team leads confirmatory diligence with a focus on efficiency. We understand the demands that the due diligence process puts on Founder’s time. To help with this, we ensure our data requests focus on priority items.
In tandem we’ll draft the Purchase Agreement, aligning legal documentation with deal terms.
It’s worth noting that many acquisitions fall short at this stage because buyers lose sight of what truly drives value. As Harvard Business Review notes, buyers often over-index on operational synergies while underestimating the importance of customer relationships and strategic alignment. That’s why our diligence process includes investigating how your business really works, and understanding how to preserve what makes it successful.
5. Deal Close
Final Signing and New Beginnings
With due diligence complete, and the Purchase Agreement finalized, we move to close. This isn’t the end—it’s the start of a new chapter for your team, your customers, and for you.
Many Founders stay on in advisory or operational roles. Others transition to new ventures, or head towards retirement. Many tell us that after a sale, they finally get the time to reclaim their weekends, their energy, and their sense of balance without worrying about what’s next for their team.
As Brad Bell, co-founder of Campana Systems, shared after selling his business to Perseus:
“The exit was about more than the numbers. It was about knowing the business, and the people, would thrive without me.”
Read Brad’s full story here: Life After Exit: How Selling Campana Opened the Door to a New Chapter
Final Thought: A Process Built on Respect
When done right, M&A opportunities can unlock growth, open new career paths for your team, and allow you to step into your next chapter with confidence.
If you’re considering what comes next, we’d welcome the opportunity to get to know you. Connect with us today.
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