🚩 The businesses I WON'T buy

Hey builders!

I’m back in France, after selling the villa in Bali.

Now, we gotta find a $300k SaaS to buy.

When I tweeted about that last week, I received dozens of DMs and emails sharing softwares to buy

Some folks didn’t even want to transact in money, they wanted to exchange SaaS for the villa 🤣🤣

I respect the hustle. But we gotta think right...

While browsing the businesses on offer, I noticed something:

For most of these businesses, I wouldn’t want to buy them. Because of certain metrics that don’t match my criteria.

🚩🚩 Here are the top red flags I look at while buying businesses:

PS: What’s a red flag for me might be the perfect metric for someone else. Everyone’s investment philosophy is different.

B2C Businesses

I got some amazing offers for some Audio Notes apps. And by all means I love these products.

But I don’t have the experience of growing a B2C business.

And I don’t want to experiment.

I want to get into a domain I know, resonate with, and understand a clear path ahead.

>20% Churn (Especially for AI SaaS)

AI is the new rage, and I’m open to buying more AI products.

But not with a very high churn. Anything above 20 is a no-go.

It shows the product is good at attracting customers, not retaining them.

And if the product is not sticking, all growth will plateau super fast.

The Tech Stack

I’m always working on more than 1 product at any given time. And wouldn’t want to change my tech stack while doing so.

So if you’re going to bring me a product built on PHP, sorry but the deal is not happening!

I need to be comfortable with the tech I’m working on.

My current tech stack: Javascript, NextJS, Firebase & Firestore.

It should have problems

This might seem weird, but I want a business with problems.

Problems that I know I can fix, and increase the Enterprise Value.

If I’m getting a business with:

• 3% churn

• 9% mom growth

• 18-month LTV

Then what’s there for me to do?!

And better yet, why are you selling?

If it’s that good — don’t sell.
And if you’re selling — you’re hiding something.

And I don’t want to buy a business based on suspicion.

So these were my red flags while buying a business.

What’s yours?

Email me with your red flags while looking at a business 👇👇

I read every email :))

Soon, I’ll be sharing what SaaS I’m buying and why. 👀👀

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Keep building

Tibo 💻