Acquiring software companies sounds difficult but is actually easy. Vivek at QuestionPro will tell you to avoid lawyers. James at Cognism acquired a sales motion (PLG). Savneet Singh at Par acquired for EBITA ($40m ARR, $5m EBITA).
Regardless of strategy, the goal is to buy cheap and get deals done fast. In this article you’ll learn from 5 CEO’s who are world class at acquiring other companies. They are so good that they’ve been invited back several times to Founderpath’s annual CEO retreats.
This article is a sneak peak into those backroom conversations where being a fly on the wall is 10x more useful than a Stanford MBA.
QuestionPro Acquires 5 Companies for Under $1m
QuestionPro is an online survey and form company. CEO Vivek Bhaskaran is scrappy deal maker who gets really creative.
5 recent deals he's closed:
Deal Insights Analysis
Company
Stated/Implied Deal Value
Key Structuring Elements
Lesson Learned
TruMyUI
$200k
(Not detailed, shown on chart)
Part of growth, likely opportunistic.
WorkXO
$280k
(Not detailed, shown on chart)
Part of growth, likely opportunistic.
Enprecis
$800k All Cash
Distressed Seller (PE Fund closing), Fast Close (30d LOI)
Be opportunistic, know value to you, Cash & Speed wins.
Acqui-hire 1
$50k Cash + Rev Share + Salary
Small cash upfront, Founder joins w/ salary + upside
Creative structuring for talent acquisition.
Acqui-hire 2
$140k - $180k (Upfront + Deferred) + Salary
Negotiated via text, Upfront + Deferred cash + Salary
The PE firm needed to sell because they were shutting down their fund. This created buyer leverage.
Deal Value
$800,000 All Cash (LOI shown). (Despite an initial counter-offer of $1M from the seller). This was a very low multiple (~0.2x ARR) because of the seller's situation and Vivek assessing what it was worth to him.
Approach
Vivek asked the PE firm "Tell me what it's worth to you?" knowing their fund constraints. He made a quick offer (initially drafted on his iPhone!), focused on All Cash and a Fast Close (30 days). He anchored the price first based on what he could afford and risk, then worried about diligence.
How To Acquire at Deep Discounts
Most founders think they need lots of cash to buy other companies. QuestionPro acquired this $3.5m ARR company for just $800k cash up front.
Enprecis Case Study
Aspect
Details
Company
Enprecis (A portfolio company of a Private Equity firm)
The PE firm needed to sell because they were shutting down their fund. This created buyer leverage.
Deal Value
$800,000 All Cash (LOI shown). (Despite an initial counter-offer of $1M from the seller). This was a very low multiple (~0.2x ARR) because of the seller's situation and Vivek assessing what it was worth to him.
Approach
Vivek asked the PE firm "Tell me what it's worth to you?" knowing their fund constraints. He made a quick offer (initially drafted on his iPhone!), focused on All Cash and a Fast Close (30 days). He anchored the price first based on what he could afford and risk, then worried about diligence.
The Fast, Low Cost Way to Acquihire
Workforce President Deal
Aspect
Details
Company
Unnamed
Deal Value
$50k Cash Upfront for the business, plus a 50% Revenue Share on 2018 revenue generated, plus the Founder joined as President of Workforce with a $100k base salary.
How
A clear acqui-hire focused on bringing the founder onboard with salary and potential upside, using minimal upfront cash for the actual business entity.
Speed and simplicity can be key advantages.Agree on the price, especially the upfront cash amount, quickly.
Use simple Letters of Intent (LOIs) or term sheets, even via email or text, for initial alignment.
Offer all cash and a fast closing timeline (like 30 days) when possible, as this is very attractive to sellers.
Know your absolute limit for upfront cash risk and structure the rest of the deal with less risky components like deferred payments or earn-outs if necessary.
Cognism Pays 9x for Kaspr
James Isilay, CEO of Cognism, was looking for a way to add a PLG motion to GTM machine. Cognism was really good at selling mid market and enterprise and didn't want to cannablize revenue by adding its own cheap or free option to run a PLG playbook to get a higher volume of leads each month. He turned to acquisitions instead.
Cognism Kaspr Deal Terms
French Deal Structure
Aspect
Details
Valuation
Set at a 9x market multiple (likely based on ARR, although the specific metric wasn't explicitly confirmed as ARR vs Revenue in this context).
Structure
The deal was structured primarily using cash due to unfavorable French tax implications on equity for the sellers.
Cash Component
65% of the total consideration was cash, with a portion paid upfront.
Earn-out Component
35% of the total consideration was structured as an earn-out, paid out over time based on performance milestones. This incentivized continued growth and partnership post-acquisition.
Equity
Due to the aforementioned tax issues in France, the deal did not include an equity component for the sellers.
How Much Time Does It Take to Acquire a SaaS Company?
Cognism acquired Kaspr in 6 months.
Cognism-Kaspr Acquisition Timeline
Time
Event
Description
September 2021
Identification
Cognism noticed Kaspr (a French, bootstrapped, PLG-focused competitor with lower ACV and strong individual user retention) appearing in their deals, particularly after Kaspr hired a UK sales resource.
October 2021
Initiation
James Isilay personally reached out via LinkedIn, first connecting with Kaspr's CTO, then the CEO.
November 2021
Vision & Relationship Building
James flew to Paris to meet the Kaspr team, build rapport, and sell the vision. The core idea was to combine Kaspr's effective PLG motion (acquiring smaller users efficiently) with Cognism's strong direct sales force (for upselling to larger, org-level deals).
November 2021
LOI Signed
A Letter of Intent (LOI) was signed, grounding expectations.
January 2022
Due Diligence
Financial, technical, legal, and HR due diligence commenced.
March 2022
Closing
The transaction was completed.
Lemlist Pays $2m for Taplio
In 2022, Lemlist was looking for a product like TweetHunter but for Linkedin. They ended up acquiring the business to accelerate product development.
Taplio Detailed Timeline
Date
Event
Financial/Growth Data
2018
Lemlist started
Initial investment of $1,000
2021
Taplio and Tweet Hunter launched
December 2021
Lemlist sold 20% of business
$30M for 20% ($150M valuation)
January 2022
Louis-Lucas and Jacquesson began looking for a buyer
Tweet Hunter reached $1M revenue in first 12 months
Early 2022
Reconnection with Guillaume Moubeche
$100,000 MRR for Taplio & Tweet Hunter combined
2022
Acquisition deal closed in two weeks
$2M initial cash payment + earn-out provisions
2022 (Acquisition)
User base at time of acquisition
5,000 Tweet Hunter users, 3,000 Taplio users
January 19, 2023
Acquisition publicly announced
Total deal value in "8 figures" (with earn-out)
2024
Growth under Lemlist's ownership
Taplio reached $3.5M ARR
2025
Current status
$6.5M ARR for Taplio & Tweet Hunter combined
The busienss was doing $1.2m in ARR at the time of acquisition and Lemlist paid $2m cash upfront with extra upside on the earnout:
Taplio Financial Metrics
Metric
Value
Source
Initial Cash Payment
$2 million
Indie Hackers
Total Deal Value
8 figures (with earn-out)
Indie Bites podcast
Tweet Hunter Revenue at Acquisition
$1 million (after 12 months)
Indie Hackers
Taplio & Tweet Hunter MRR at Acquisition
$100,000
They Got Acquired
Tweet Hunter Users at Acquisition
5,000
They Got Acquired
Taplio Users at Acquisition
3,000
They Got Acquired
Taplio ARR by 2024
$3.5 million
Mindstream News
Combined Taplio & Tweet Hunter ARR by 2025
$6.5 million
Welcome to the Jungle job posting
Blackthorn Acquires to Speed up Product Development
Federspiel has bootstrapped Blackthorn to $17m in ARR (as of May 2025) using debt to buy up adjacent products.
Acquisition 1: PCIFY (PCI Compliance)
Strategic Rationale
Fill Product Gap: Blackthorn needed PCI compliance features to complement their core Payments app.
Known Entity: Chris knew the owner/developer.
Buy vs. Partner: Decided acquiring was strategically better than a simple partnership.
Cross-sell Opportunity: Added more value and product surface area to sell to existing and new customers.
Key Deal Terms
Target ARR: ~$130,000
Purchase Price: $850,000
Payment Structure: Down payment + remaining paid over 2.5 years. (Seller was happy to exit the Salesforce space).
Lessons Learned/Outcome
Acquiring known tech/teams can be efficient.
Immediately unlocked higher pricing potential for the combined offering (first deal post-acquisition was $60k vs. PCIFY's previous max of $6k).
Validated the "buy vs. build" approach for specific needs.
Acquisition 2: Textey (SMS Messaging)
Strategic Rationale
Customer Demand: Strong, identified need for SMS capabilities from their core Higher Ed and Non-profit customer base (surveyed customers).
Buy vs. Build: Avoided development time and integration work by acquiring existing, functional tech on the Salesforce platform.
NRR Driver: Expected SMS usage to significantly increase Net Revenue Retention.
Direct Outreach: Chris reached out directly to the owner (Clint) of the single-developer company.
Payment Structure: $1.2M down payment + $2M paid quarterly over 24 months.
Funding: Funded via their debt facility, avoiding equity dilution. (Note: The debt provider later required paying off the seller note faster than initially planned).
Lessons Learned/Outcome
Listening to customer needs directly drives valuable acquisition targets.
Buying proven technology eliminates build/integration risk and accelerates time-to-market.
Acquisitions can be funded creatively using debt without dilution, especially when bootstrapped.
Structuring payments over time can make larger acquisitions feasible.
Acquired products can significantly boost NRR.
Par Spends $375m for $80m ARR
Savneet Singh took over as CEO of NYSE:PAR around Dec 2018 when PAR was largely a hardware and defense contracting company with minimal ($5M) SaaS revenue.
Turnaround Strategy: Transform PAR into a leading, unified SaaS platform for enterprise restaurants ("ERP platform to run your restaurant").
Savneets strategy involved: Divesting non-core, profitable assets (like the legacy defense business, sold for ~$102-103M) to fund the transition and focus. Rebuilding core, broken products (like the POS system) requiring significant reinvestment ($ tens of millions). Aggressively acquiring complementary SaaS companies to build out the platform capabilities (POS, Back Office, Loyalty, Online Ordering, Payments etc.). Focusing on capital-efficient growth, measured by ARR per Share as a proxy for future free cash flow. Achieving profitability by controlling operating expenses while growing ARR significantly. Valuation Timing: Savneet acknowledged PAR's stock was likely overvalued in 2021 (trading ~30x revenue) and strategically used this high valuation to acquire companies ("selling shares left and right"). He later felt the stock became undervalued relative to its performance.
PAR acquires Task
In addition to acquiring TASK at a revenue mutiple that was lower than where PAR was trading publicly, the aquisition sped up product development.
TASK Case Study
Aspect
Details
Deal Terms
Announced early 2024
Acquisition Price
$206 million
Target Financials
$40 million ARR, $6 million EBITDA
Implied Multiples
~5.15x ARR, ~34.3x EBITDA
Strategy
Part of the ongoing platform build-out strategy. TASK likely added key functionalities or market presence PAR desired (specifics not detailed in the clip).
Strategy Additional
Acquired using PAR's relatively strong stock valuation at the time (even if down from 2021 peaks).
Lessons
The multiples reflect the specific profile of TASK (growth rate, profitability, strategic fit) and market conditions at the time of the deal.
Lessons Additional
Demonstrates PAR's willingness to pay a significant multiple for strategic assets, even based on EBITDA (34x), likely driven by expected synergies and future growth integration into the PAR platform.
PAR acquires Stuzo
PAR paid 4.25x ARR when its own share price was trading at a 10x multiple on SaaS revenues. PAR cashed in on what many call "financial arbitrage".
Stuzo Case Study
Aspect
Details
Deal Terms
Announced early 2024, closed near TASK
Acquisition Price
$170 million (Paid in Cash)
Target Financials
$40 million ARR, $14 million EBITDA
Implied Multiples
~4.25x ARR, ~12.1x EBITDA
Strategy
Further platform expansion, explicitly adding capabilities for engaging consumers across restaurants and retail/convenience stores/fuel ecosystems. Stuzo brought strengths in loyalty and digital ordering/delivery.
Strategy Additional
Funded significantly by cash generated from the divestiture of the non-core defense business, showcasing active capital reallocation.
Strategy Goal
Strategic goal: Reduce the number of vendors restaurants need by offering a more unified suite (PAR aims for clients to need ~5 vendors instead of 20-40, with PAR being a major one).
Lessons
Tough Negotiations: Savneet explicitly mentioned the Stuzo founder didn't speak to him for 30 days post-deal announcement due to the negotiated price, highlighting the importance of sticking to valuation discipline even if it strains relationships initially (they are now "good buddies").
Anchoring
Valuation Anchoring: Savneet advises founders selling their companies to anchor expectations around median market multiples (historically 5.5-6x NTM revenue for public SaaS) rather than peak hype multiples. Buyers like PAR will likely value based on these more normalized metrics and future cash flow potential.
Profitability
Profitability Matters: Stuzo's higher EBITDA margin ($14M on $40M ARR vs TASK's $6M on $40M ARR) resulted in a significantly lower EBITDA multiple (12x vs 34x) despite a similar ARR multiple, showcasing how profitability impacts acquisition valuation.
Pre-Deal Rigor
Pre-Deal Rigor: Savneet emphasizes PAR's process of having detailed financial, organizational (reporting structure), and cultural integration plans before closing any deal, which is critical for M&A success.
In Summary
If you're consdiering an acquisition, clearly define why you're doing it:
Acquire to accelerate product like Lemlist + Taplio ($2m) Acquire to buy a new sales motion like Cognism + Kaspr (9x ARR) Acquire to get key talent like Question Pro ($200k) Acquire for multiple arbitrage like Par + Stuzo ($150m)
Lastly, de-risk the deal by negotiating to minimize up front cash.
