Lessons from the Frontlines: A Recap on My Experience Selling and Buying Online Businesses in 2024
Discover the real story behind online business M&A in 2024: declining valuations, successful exit strategies, and why a niche SaaS company commanded a 6x multiple. Key insights from actual deals and market trends.
The M&A landscape for online businesses in 2024 told a story of adaptation, as both buyers and sellers adjusted to a market far different from the heady days of 2021-2022. While many predicted doom and gloom, successful deals still closed – they just required a different playbook.
The Valuation Reset
Perhaps the biggest story of 2024 was sellers grappling with the new valuation reality. Gone were the frothy multiples of the pandemic era, replaced by a market that demanded both current profitability and future potential. Many businesses arrived at market showing declining trends, forcing sellers to master a new skill: articulating clear, convincing turnaround narratives.
A Tale of Success: Moats Matter More Than Ever
One transaction perfectly illustrated what buyers valued in 2024: a SaaS business in a niche market achieved a 6x earnings multiple – remarkable in this environment – thanks to three critical factors:
- Zero venture-backed competition in their space
- High customer diversity preventing concentration risk
- Strong product stickiness driving predictable revenues
This deal highlighted how businesses with defensive moats could still command premium valuations, even as the broader market softened.
The Hidden Killer: Operational Drift
The most painful lessons of 2024 came from sellers who took their eye off the ball. Multiple promising deals collapsed not because of buyer issues, but because sellers lost focus during the sale process, leading to performance dips that spooked buyers. The mantra “run your business as if it won’t sell” proved prophetic.
What Actually Worked in 2024
The deals that successfully closed shared common characteristics:
- Clean, well-documented financials that could withstand scrutiny
- Transferable relationships with both vendors and employees
- Sellers who demonstrated emotional readiness for exit
- Clear cost reduction strategies already in motion
- Demonstrated paths to profitability, not just growth
The Macroeconomic Double-Whammy
Two major factors shaped deal dynamics in 2024: elevated interest rates and reduced consumer demand. This combination forced both buyers and sellers to get creative with deal structures and focus intensely on operational efficiency rather than just top-line growth.
Why 2025 Looks Different
As we look ahead, there’s tangible cause for optimism. I’m seeing increased buyer activity, growing seller interest in exits, and anticipated interest rate reductions. However, this won’t be a return to 2021 – instead, expect a more balanced market where both buyers and sellers have adapted to the new reality.
The harsh lessons of 2024 created a more mature market. While multiples may not return to peak levels, the deals closing now are built on stronger foundations. For sellers considering exits in 2025, the message is clear: preparation and performance matter more than ever.