Andrew GazdeckiSerial Entrepreneur Driving Startup Acquisitions

The most common deal structure we see on Acquire.com

6 Feb 2024

Watch on YouTube

This is a YouTube video titled "The most common deal structure we see on Acquire.com" containing a monologue explaining typical acquisition deal structures for SaaS startups, including cash on close and seller financing, recorded in February 2024. The speaker provides an example scenario to illustrate common financial terms in acquisitions.

Going to go ahead and give probably the most common deal structure that we see on acquired.com and we're going to use the example. It's a SaaS startup, it's profitable, it's doing 1.5 million revenue, 500,000 of that is in profit. Total purchase price on that probably, let's call it $4 million. And then out of that $4 million, you'd probably typically see 50 to 75% cash on close. So we use 3 million cash on close as an example. And cash on close means that's the money that's going to be wired to you when you close the acquisition. Now, the remaining 25% is going to be on seller financing, which is going to be paid to you over a period of 24 to 36, however many months that you agree to. But that's a very typical structure. So if you see seller financing in your deal, don't think it's a bad thing. It's actually really, really common. And up to, I believe, 70% of all acquisitions have some form of seller financ involved.