How Long Does It Take to Sell a Software Company?

For software founders contemplating an exit, one of the first questions that arises is deceptively simple: how long will it take to sell my company? The answer, as with most things in M&A, is: it depends. But with the right preparation and advisory support, the timeline can be managed strategically to align with your goals — whether that’s maximizing valuation, minimizing disruption, or closing before year-end.

This article breaks down the typical timeline to sell a software company, the key phases involved, and the variables that can accelerate or delay the process. We also offer insights from iMerge’s experience advising software and SaaS founders through successful exits.

Typical Timeline: 6 to 12 Months from Start to Close

On average, the sale of a software company takes 6 to 12 months from initial preparation to final closing. However, this range can vary significantly based on company size, deal complexity, buyer type, and market conditions.

Here’s a high-level breakdown of the phases:

• Pre-Market Preparation (1–3 months): Financial cleanup, data room assembly, positioning, and valuation analysis.
• Go-to-Market & Buyer Outreach (2–4 months): Engaging strategic and financial buyers, managing NDAs, and fielding initial interest.
• Negotiation & LOI (1–2 months): Term sheet discussions, exclusivity, and selection of the lead buyer.
• Due Diligence & Closing (2–3 months): Legal, financial, and technical diligence, followed by final documentation and closing.

While some smaller SaaS businesses can transact in under six months, larger or more complex deals — especially those involving international buyers, regulatory approvals, or earn-outs — may take longer.

Factors That Influence Deal Timeline

Several variables can meaningfully impact how long it takes to sell a software company:

1. Company Readiness

Companies that have completed pre-LOI due diligence, maintain clean financials, and have clear customer contracts are far more likely to move quickly through the process. Conversely, if a buyer uncovers gaps in documentation or unclear IP ownership, the timeline can stretch by months.

2. Buyer Type

Strategic buyers (e.g., larger software firms) often move faster when there’s a clear product or market fit. Private equity buyers, on the other hand, may require more extensive diligence and internal investment committee approvals. In iMerge’s experience, PE-led deals tend to take longer but can offer more flexible structures.

3. Deal Structure

Asset sales vs. stock sales, earn-outs, rollover equity, and working capital adjustments all add complexity. As we’ve discussed in Asset versus Stock Sale, the structure you choose can materially affect both the timeline and tax implications.

4. Valuation Alignment

Misalignment on valuation expectations is one of the most common causes of deal delays or failures. Founders who enter the process with a realistic understanding of valuation multiples for software companies are better positioned to negotiate efficiently and avoid protracted back-and-forth.

5. Market Timing

Broader M&A market conditions — including interest rates, public SaaS multiples, and buyer appetite — can influence how quickly buyers move. In periods of volatility, even well-prepared companies may face longer timelines as buyers become more cautious.

Case Study: A Mid-Market SaaS Exit in 8 Months

Consider a fictional but representative example: a $12M ARR vertical SaaS company with 90% gross margins and 110% net revenue retention. The founder engaged iMerge to explore a sale after receiving inbound interest from a strategic acquirer.

After a 6-week preparation phase — including financial recasting, KPI benchmarking, and buyer materials — iMerge launched a targeted outreach process. Within 60 days, the company received three LOIs, ultimately selecting a private equity-backed platform buyer offering a 7.5x ARR multiple with partial rollover equity.

Due diligence took another 10 weeks, with legal and tax structuring adding complexity due to international operations. The deal closed in just under 8 months from kickoff — a timeline made possible by early preparation and experienced advisory support.

How to Accelerate the Process

While some factors are outside your control, there are several ways to reduce friction and shorten the timeline:

• Start early with exit planning — even 12–18 months before a desired sale window. This allows time to optimize KPIs, clean up financials, and address any red flags.
• Work with an experienced M&A advisor who understands the software landscape and can manage buyer outreach, diligence, and negotiations efficiently.
• Prepare a robust data room in advance, including financials, contracts, IP documentation, and customer metrics. See our Top 10 Items to Prepare When Selling Your Website for a helpful checklist (equally applicable to SaaS).
• Align internal stakeholders — including co-founders, board members, and key employees — to avoid delays during decision points.

Final Thoughts

Selling a software company is not a sprint — but it doesn’t have to be a marathon either. With the right preparation, realistic expectations, and experienced guidance, most founders can navigate the process in 6 to 12 months. The key is to treat the sale as a strategic process, not a reactive event.

Firms like iMerge specialize in helping software and SaaS founders manage this journey — from valuation and positioning to buyer negotiations and closing. Whether you’re exploring a full exit or partial liquidity, the timeline can be tailored to your goals with the right team in place.

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.