with ScreenCloud competitor digital signage SaaS listing · Digital signage/broadcast software listing
LenderHawk analysis. Not affiliated with or endorsed by Acquisitions Anonymous.
The hosts viewed the listing as a small, potentially sticky digital-signage-style software product, but one with a stretched valuation, unclear revenue quality, and likely limited buyer appeal unless a strategic buyer highly valued the customer base or IP.
A software teaser that says a business is recurring-revenue based still needs proof that revenue is actually recurring and not merely reoccurring.
For very small SaaS businesses, public-company revenue multiples can look flattering while still being too rich because the scale is dramatically different.
A buyer should check whether customer relationships and new sales are concentrated in the founder or a handful of employees before paying a software multiple.
LTV/CAC is useful only if the seller can explain exactly how it was calculated and what expenses were included.
Businesses selling discretionary software are more vulnerable to churn and economic downturns than mission-critical back-office tools.
When a seller’s price expectation is far outside what the market will support, the first job is to determine whether the conversation is worth continuing.
A listing can be mislabeled as software even when the economics look more like custom development or professional services.
If the business cannot scale revenue without adding labor at roughly the same pace, it should be underwritten like services, not SaaS.
True recurring revenue behaves predictably and supports higher multiples; reoccurring revenue merely repeats often enough to sound similar but does not deserve the same valuation.
When to use: Use this when a SaaS teaser or broker deck claims subscription-like durability without showing retention or contract data.
Steve’s diligence posture is to assume a deal is flawed until the buyer proves otherwise through data, economics, and transferability.
When to use: Use this at the beginning of sourcing and screening so weak deals are eliminated before they consume time.
The first listing was asking $30 million on $2.5 million of TTM revenue, which the hosts framed as roughly 12x revenue.
MicroAcquire software listing discussed by the panel.
The same listing was said to be running at about $250,000 of monthly revenue, implying about a $3 million annual run rate.
The hosts compared trailing revenue to current run rate.
The business reportedly had only $100,000 of TTM profit on $2.5 million of revenue.
Used to question whether the company was overstaffed or under-profitable for its size.
Steve said average public SaaS companies trade around 15x revenue but with about $600 million of revenue, not $3 million.
He used this to argue the multiple was misleading at small scale.
He also said average North American SaaS M&A in 2021 was about 7x revenue.
Used as a private-market comp set against the listing ask.
The second listing had $3,965,000 of gross revenue, $1,414,000 of cash flow, and a claimed 2021 adjusted EBITDA of $2 million.
BizBuySell software services listing discussed later in the episode.
The second business was asking $16 million, which the hosts framed as about 4x revenue, 8x EBITDA, and 11x cash flow.
The panel contrasted it with the first listing.
Steve said only about 9% of owner-led businesses have formal succession plans.
Used while discussing the search-fund thesis and owner succession situations.
The search-investment firm said it backs businesses generally between $5 million and $30 million of revenue and/or $1 million to $5 million of EBITDA.
Steve described Mineola Search Partners’ target range.
Get value expectations on the table in the first conversation.
Why: If the buyer and seller are speaking different valuation languages, the deal is almost certainly dead and later diligence will waste time.
Underwrite small software businesses by testing whether revenue is truly recurring, not just repeating.
Why: A reoccurring customer base does not justify the same multiple as subscription revenue with strong retention.
Check whether sales and customer relationships are tied to the seller or a small set of employees.
Why: Key-person dependence can make transferability much weaker than the teaser suggests.
Treat LTV/CAC numbers as suspect until the seller shows the calculation and the expense buckets used.
Why: The metric is easy to massage and often relies on incomplete or messy SMB records.
Screen for customer concentration, even when the teaser implies a large customer base.
Why: A range like 1,000 to 10,000 customers can hide severe concentration risk in a few accounts.
Underwrite discretionary software more conservatively than mission-critical software.
Why: Customers can cut discretionary tools faster when budgets tighten, which increases churn risk.
If a listing reads more like a development shop than a product company, value it like services.
Why: Revenue in a labor-based shop does not scale nonlinearly the way true software should.
Steve raised a search fund in 2012, bought a Canadian software company in early 2014 from a father-son team, ran it for about seven years, and sold it in September 2020 to a PE-backed strategic buyer. He framed that path as the reason he now invests in and supports searchers.
Lesson: Operating experience across search, acquisition, and exit gives an investor a better feel for how hard the job really is.
The panel treated the MicroAcquire deal as a classic example of a seller or advisor anchoring on a huge number without matching market reality. They argued that such a mismatch often kills deals before real diligence begins.
Lesson: Overpricing is not just a valuation issue; it is a screening issue that can save or waste months.