Episode Details

Raj Sheth bootstrapped RecruiterBox to $4M ARR, sold to private equity, and then built a SaaS factory focused on buying and selling SaaS businesses. His first SaaS acquisition returned 3x in 13 months.

Learn how Raj evaluates SaaS companies at $1-3M ARR, turns them around with a SaaS turnaround playbook, and positions each one for selling a SaaS business at a premium. His system targets 50% EBITDA before reinvesting.

Raj is the founder of Decalab, which specializes in buying SaaS companies and selling a SaaS business after optimizing operations. Before selling a SaaS business became his focus, he grew RecruiterBox using SEO, content marketing, and paid acquisition.

🔑 Key Lessons

• 🎯 Selling a SaaS business starts with buying right: Raj targets companies at $1-3M ARR with low churn but stalled growth, paying sub-3x multiples on net profit.
• 📉 Cut costs to 50% EBITDA before selling a SaaS business: After his first SaaS acquisition of FlyData, Raj removed the founder's salary and reinvested profits into growth.
• 🔄 Use Crunchbase to find SaaS businesses to buy: Raj searched for companies that raised money 4+ years ago with fewer than 10 employees, booking 22 Zoom calls in 3 days.
• 💰 Low churn makes buying SaaS companies safer: Resilient recurring revenue gave Raj time to learn the space before turning FlyData around and selling.
• 🛠️ Selling a SaaS business you've improved compounds returns: Decalab aggregates 5-10 companies, moving profits between them and sharing playbooks across the portfolio.

Chapters

• Introduction
• What is Decalab and the SaaS factory model
• Two failed B2C startups before SaaS
• Co-founding RecruiterBox
• Growing RecruiterBox to $4M+ ARR
• Early growth channels: Google Apps, HARO
• SEO as the primary growth channel
• Paid acquisition economics
• Attempting the move upmarket
• Buying SaaS companies through Decalab
• Finding targets on Crunchbase
• SaaS turnaround: FlyData sold for 3x
• Building the selling a SaaS business thesis
• Why acquiring beats building
• Lightning round

Resources

• Full show notes: https://saasclub.io/301
• Join 5,000+ SaaS founders: https://saasclub.io/email