Choosing the Right Buyer for Your Software Business

For many software founders, selling their business is one of the most significant decisions of their careers. While price is often the initial focus, the nuances of the deal—what happens to your team, your technology, and even your own role post-sale—can be just as important. The right buyer isn’t just about the highest offer; it’s about alignment with your goals.

To help you navigate this decision, here’s a breakdown of three common types of buyers, using an estimated $10 million enterprise value as an illustrative example.

Private Equity: Financial Upside, but Less Control

Private equity (PE) firms are known for their financial backing, typically using leverage (debt) to amplify returns. If you sell to PE, you can expect to receive $8 million in cash, with an additional $2 million in earnout tied to future performance. You’ll likely be asked to stay on as CEO for 3-5 more years, with the opportunity to roll 0-10% of equity into the new entity.

This structure can provide a second payout down the road, but it also comes with risk—your business may be merged with other acquisitions, priorities could shift, and restructuring decisions may be made based on financial metrics rather than company culture.

Once the deal closes, you are no longer in control—decisions are made based on what’s best for the PE fund, not necessarily what’s best for your company or team. Many PE firms operate with integrity and genuinely want to see businesses thrive, but their primary goal is maximizing investor returns. This means their focus is often on driving aggressive growth, cost optimization, or exit strategies, which can impact your team’s long-term stability.

Jaan Capital: A Founder-Friendly, Long-Term Growth Partner

Jaan Capital is led by former SaaS CEO Raj Mahajan, who brings hands-on experience in scaling and operating software businesses. Unlike PE firms that focus on financial engineering, Jaan prioritizes sustainable growth through investment in product, people, and sales expansion.

For the same business, Jaan typically offers:

• $7-8 million in cash upfront

• $1-2 million in earnout

• 0-20% rolled equity (seller discretion), allowing you to participate in future upside

Unlike private equity, Jaan is not backed by financial engineers; instead, it is supported by experienced software operators and investors who serve as advisors, not executives. Raj is the sole operator, making decisions with a long-term growth mindset, not short-term financial targets.

Jaan also provides flexibility in your role post-sale:

• Stay involved as a board member or advisor

• Take another role within the company

• Exit completely

  
  

Jaan does not require founders to stay on as employees unless they want to. If you remain involved, it’s as a partner rather than an employee. Any debt used in the transaction is structured based on what the business can support while continuing to invest in growth—not to extract maximum short-term returns.

Since Jaan is not managing a large portfolio of companies, your business remains a priority, and you work directly with Raj as the new operator. If you want to ensure that your team, culture, and product continue to grow, Jaan provides a balanced approach.

Strategic Buyers: Maximum Cash, Maximum Change

If you’re looking for the highest cash payout upfront, strategic buyers—often large software companies—can be appealing. They typically offer $10-12 million of enterprise value, with $2 million in earnout tied to customer retention or migration to their platform, and there would be no rolled equity. However, with that premium price comes significant change.

Strategic buyers often acquire companies to absorb customers, technology, or revenue, which can result in:

• Team layoffs or restructuring

• Product integration into a larger platform (or being sunset altogether)

• Leadership changes impacting the company’s future direction

Once the sale is complete, your involvement ends, often with a brief transition consulting period. If your primary goal is a clean exit with no further responsibilities, a strategic buyer may be the best fit. However, if you care about ensuring your team and technology remain intact, it may not be the right choice.

Which Buyer Is Right for You?

The best option depends on your goals:

✅ If you want to maximize upfront cash and exit completely → Strategic Buyer

✅ If you’re open to staying involved but want a second payout → Private Equity

✅ If you want flexibility, growth investment, and long-term alignment → Jaan Capital

Selling your business is about more than just the final price—it’s about the future you want to create for yourself, your team, and your legacy. If you’re looking for a hands-on, founder-friendly approach where you work directly with an experienced SaaS operator, let’s talk.

Use the chart below to evaluate which buyer aligns best with your priorities.