How to Find Off-Market Deals for Buying Software Companies

In the world of software M&A, the most compelling opportunities are often the ones you never see on a marketplace. Off-market deals — transactions that occur without public listings or broad auction processes — offer buyers a chance to acquire high-quality assets with less competition, more favorable terms, and deeper strategic alignment. But sourcing these deals requires more than capital. It demands access, insight, and a disciplined approach to relationship-building.

This article outlines how private equity firms, strategic acquirers, and buy-side advisors systematically uncover off-market software company deals — and how firms like iMerge help buyers navigate this opaque but rewarding terrain.

Why Off-Market Deals Matter in Software M&A

In a competitive M&A environment, proprietary deal flow is a strategic advantage. Off-market deals often:

• Involve less bidding pressure, leading to more rational valuations
• Allow for deeper pre-LOI diligence and relationship-building
• Provide access to founders who may not be actively seeking an exit
• Enable creative structuring, such as earn-outs or equity rollovers

For buyers focused on long-term value creation — especially in vertical SaaS, infrastructure software, or AI-enabled platforms — these deals can be transformative. But they don’t appear in your inbox unsolicited. They must be cultivated.

1. Build a Targeted Acquisition Thesis

Before you can find the right off-market deal, you need to define what “right” means. This starts with a clear acquisition thesis. Consider:

• Sector focus: Are you targeting B2B SaaS, DevOps tools, or healthcare IT?
• Stage and size: Do you prefer $2M ARR businesses or $20M+ platforms?
• Geography: Are you open to cross-border deals or focused on North America?
• Strategic fit: Are you looking for tuck-ins, platform plays, or capability extensions?

Firms that articulate a clear investment thesis — and communicate it consistently — are more likely to attract inbound interest from founders, advisors, and intermediaries.

2. Leverage Buy-Side M&A Advisors

One of the most effective ways to access off-market software deals is through a specialized buy-side M&A advisor. These firms maintain deep networks of founder relationships and often know which companies are quietly exploring options long before a formal process begins.

At iMerge, for example, we help acquirers identify, approach, and engage software companies that align with their strategic goals — often before those companies have even considered a sale. Our team handles outreach, qualification, and early-stage diligence, allowing buyers to focus on high-probability targets.

Buy-side advisors also help navigate sensitive conversations, especially when founders are emotionally invested or unsure about timing. This is particularly valuable in founder-led SaaS businesses, where trust and discretion are paramount.

3. Build Direct Relationships with Founders

While intermediaries play a key role, many off-market deals originate from direct relationships. Consider the following strategies:

• Industry events: Attend niche SaaS or vertical software conferences where founders gather.
• Content and thought leadership: Publish insights that resonate with your target audience — founders often reach out to those who understand their space.
• Warm introductions: Use your network to connect with founders through investors, advisors, or customers.
• Direct outreach: Personalized, well-researched emails can open doors — especially when paired with a compelling value proposition.

Founders are more likely to engage when they feel the buyer understands their product, market, and vision. A generic acquisition inquiry rarely gets traction. A thoughtful, founder-first approach often does.

4. Monitor Signals of Exit Readiness

Not every software company is ready to sell — but many are quietly preparing. Look for signals such as:

• Leadership transitions or founder fatigue
• Slowing growth after a strong run
• Recent changes in capital structure or investor pressure
• Increased focus on profitability or recurring revenue metrics

As we noted in Exit Business Planning Strategy, many founders begin preparing for a sale 12–24 months in advance. Buyers who can identify these inflection points early — and offer a path forward — are well-positioned to initiate off-market conversations.

5. Use Data and Technology to Identify Targets

Modern deal sourcing increasingly relies on data. Tools like PitchBook, Crunchbase, and Apollo.io can help identify software companies that meet your criteria. Look for:

• Companies with strong growth but no recent fundraising
• Bootstrapped SaaS businesses with high margins
• Firms with aging domains or declining hiring trends

While these tools won’t replace human relationships, they can help prioritize outreach and uncover hidden gems. Pairing data with qualitative insights — such as founder interviews or customer reviews — creates a more complete picture of a target’s readiness and fit.

6. Offer More Than Just Capital

In off-market deals, the buyer’s value proposition matters. Founders often care as much about legacy, team continuity, and product vision as they do about price. Buyers who can offer:

• Operational support or go-to-market expertise
• Access to new distribution channels
• Flexible deal structures (e.g., earn-outs, equity rollovers)
• Respect for the founder’s culture and roadmap

…are more likely to win the deal — even at a lower headline valuation. As we’ve seen in earn-out negotiations, alignment on post-close roles and incentives can be a decisive factor in founder-led transactions.

7. Be Patient, But Prepared

Off-market deals take time. Unlike auction processes, where timelines are compressed and decisions are forced, proprietary deals often unfold over months — or even years. Buyers must be patient, but also prepared to move quickly when the moment is right.

This means having your diligence team, financing partners, and legal advisors ready. It also means understanding how to structure a deal that works for both sides — whether that’s an asset purchase, stock sale, or hybrid structure. For more on this, see our guide on Asset versus Stock Sale.

Conclusion

Finding off-market software deals is part art, part science. It requires a clear thesis, consistent outreach, and a deep understanding of founder psychology. But for those willing to invest the time and resources, the rewards can be substantial — differentiated assets, better economics, and stronger post-close alignment.

Firms like iMerge specialize in helping acquirers navigate this process — from sourcing and valuation to negotiation and close. Whether you’re a private equity firm building a platform or a strategic buyer seeking growth through acquisition, off-market deals should be a core part of your M&A strategy.

Founders navigating valuation or deal structuring decisions can benefit from iMerge’s experience in software and tech exits — reach out for guidance tailored to your situation.