
Ask HN: The Value of the Software in an Acquisition - geekslist
I&#x27;m currently trying to estimate the value of software in case of an acquisition of a SaaS company from a technical angle (People, Process, Technology). So far, I could attend several due diligences. As it seems, it&#x27;s all about MAU, MRR and Conversion Rate and so forth. The technical value of the development team (e.g. seniority), their processes (e.g. automated deployments) and the software (e.g. cloud-native architecture) built so far seemed not to play a big role in determining the value of the SaaS business.<p>So, what&#x27;s your take on this matter? In the eyes of an M&amp;A consultant, is software just a tool you can easily rebuild and replace and all that counts is the current business stats that it enables? Or is there anything I can do as a founder to raise the valuation of my business by polishing people, process and technology in the R&amp;D team?
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davismwfl
My experience in a couple of my own exits and having been on due diligence
teams for a few organizations. Rarely is your software what the value is based
on, it is the business, revenue and people. The software is just the tool
which you are using to solve the problem so it will not get much value
assigned to it. Patents hold value, and so if your software implements the
patent that does help change the picture some, but the value of the company
will still be in the business.

If you want your business to be valuable it is the combination of the
software, people, process, clients and revenue that will make it valuable. If
you have negative revenue then you will only have the value of the team,
processes & clients, the software (without patents) will be worth nearly 0 and
even with patents will only be slightly more valuable. Usually new founders
struggle with this fact thinking the software is super valuable, when in
reality it is no different then having a CNC machine. The CNC machine doesn't
hold the value, the parts coming out of it, clients and processes hold the
value.

