How to Sell a $5M ARR SaaS Firm

Getting to $5M ARR is hard. Selling a SaaS company well at $5M ARR is a different challenge altogether.

I’ve seen founders get this wrong in two opposite ways. Some rush the process, hire the first banker who takes their call, and leave millions on the table. Others overthink it, wait too long, or never prepare properly, only to realize later that they weren’t actually ready to sell when the opportunity showed up.

At around $5M ARR, you’re at a real inflection point. You’re no longer a tiny company, but you’re not yet in the fully institutional, banker-everywhere zone either. The decisions you make at this stage — especially around advisors and financial prep — have an outsized impact on outcome.

This post is about how to think through that moment like an owner, not like someone just hoping for a good exit.

Why $5M ARR is a meaningful threshold

At $5M ARR, buyers start taking you seriously. You’ve proven product-market fit, you’ve survived long enough to show durability, and your revenue base is meaningful enough that an acquisition can move the needle for a strategic or financial buyer.

But you’re also still small enough that process and positioning matter a lot. A $1M difference in adjusted EBITDA can easily translate into a $4M–$8M difference in purchase price, depending on the multiple. That’s not theoretical. I’ve seen it happen firsthand.

This is why preparation matters more than hype at this stage.

Start by getting honest about your options

The first decision most founders face is whether to run a broad process or pursue a more targeted sale.

If you’re growing extremely fast — think 70–80% year-over-year — and you’re already north of $5M ARR, there are firms like Vista Point Advisors that specialize in high-growth SaaS and can help facilitate $50M+ outcomes. They’re strong, professional, and know how to create competitive tension, but they’re selective. They expect real growth and real scale.

For many $3–5M ARR SaaS companies, though, a different class of advisors often makes more sense. There’s a solid group of boutique M&A firms that live in this range and understand founder-led SaaS businesses well: Bayberry Securities, L40 (formerly Bupos), Livmo, Influence Partners, Lightning Partners, ComCap, Elantra, Shea & Company.

These firms aren’t trying to force you into an enterprise-style process before you’re ready. They’re used to working with founders who are still involved day-to-day and who care deeply about outcome, not just speed.

The underrated option: transaction coaches

One of the most interesting ideas that came up in the discussion was the role of transaction coaches.

If you already have a pretty good sense of who your likely buyers are — maybe competitors, partners, or PE firms that have been circling — you may not need a full-blown auction process. In that case, someone like Jay Wright at Bayberry Securities, who has experience as a CFO, attorney, and M&A professor, can act as a guide through the transaction at a much lower cost.

As one founder put it, “If you already think you know who your buyer’s going to be, you want someone who can work as a transaction guide and coach at a much lower rate. For companies under $5 million where you’re trying to be lean and aren’t sure if you’ll even sell, this approach is very equitable.”

That distinction matters. Full-service firms usually charge an upfront fee plus a percentage of the transaction. Transaction coaches are often lighter-weight, more flexible, and less expensive — which can make sense when you’re still exploring whether a sale is the right move.

EBITDA is where deals are won or lost

If there’s one place founders consistently underperform in exit prep, it’s EBITDA adjustments.

Buyers don’t buy your story. They buy your numbers. And those numbers almost always get anchored to EBITDA multiples.

That means every dollar you can legitimately add back to EBITDA can materially change your exit outcome. One participant summed it up perfectly: “Look at everything on your P&L that might be discretionary — items a buyer wouldn’t need. It’s much easier to argue something back out of your adjusted EBITDA than to try to argue it in after you get something that excites you. Those adjustments made a million dollars difference in my sale.”

This is not about playing games. It’s about being precise.

Common add-backs include executive perks, car allowances, charitable donations, excessive meals and entertainment, life insurance premiums, and above-market compensation for long-tenured, loyal employees. Buyers don’t care that someone’s been with you for ten years or that you sponsor a charity you love. They care about what the business would look like under their ownership.

Even small numbers matter. A $15,000 annual expense might feel trivial, but when it’s multiplied by a 6x or 8x multiple, it’s suddenly meaningful.

Another founder shared, “I overpaid executives who were with me for a long time, had personal jet travel, charitable donations — buyers don’t care about any of that. I added all of it back. Buyers didn’t dispute any of the add-backs.”

The key is doing this work before you’re emotionally invested in a deal. Once you’re excited about a number, it’s much harder to renegotiate the foundation underneath it.

Don’t assume your banker will push hard enough

Here’s a hard truth: many brokers don’t push sellers aggressively enough on EBITDA normalization.

They want deals to close. They don’t always want friction. That means the burden is on you, as the founder, to really dig into your P&L and understand what’s discretionary versus structural.

This is one of the reasons starting early matters. Even if you’re not sure you want to sell, having clean, well-understood financials puts you in a position of strength. You’re not scrambling. You’re choosing.

Timing matters more than certainty

A subtle but important point came up in the conversation: you don’t need to be 100% sure you want to sell to start preparing.

You do need to be ready if the right opportunity shows up.

That means understanding your adjusted EBITDA, knowing which advisors make sense for your size and growth profile, and having your financial story straight. When interest comes in — and at $5M ARR, it usually does — you don’t want to be reacting from a place of confusion.

Preparation doesn’t force a sale. It gives you options.

The founder mindset that leads to better exits

Selling a $5M ARR SaaS company isn’t about finding the “best” banker or squeezing every last dollar. It’s about clarity, leverage, and intentionality.

Know whether you want a broad process or a targeted one. Choose advisors who fit your stage, not just your ego. Do the unglamorous work of cleaning up your numbers. Push hard on EBITDA adjustments early. And start preparing before you think you need to.

The founders who get the best outcomes aren’t the ones who rush. They’re the ones who understand their business deeply enough to sell it on their terms.

At $5M ARR, you’ve earned that right.