Software Development Businesses for Sale

Software development businesses sell for 3 to 10 times annual profit, with the range driven almost entirely by recurring revenue quality and whether the company owns a product. A consulting shop with strong recurring managed services might sell for 4 to 5 times profit, while a product business with subscription revenue and a deep team could reach 8 to 10 times. Use the SBA loan calculator to model what different price points look like as financed acquisitions.

Ask for three years of financials with revenue broken out by type (subscriptions, support, project work, managed services). Get a client list with tenure, revenue contribution, and contract terms. Request a plain-English overview of the technology stack, hosting setup, and deployment process. Ask who manages the product roadmap and client relationships and what those people's career plans look like. Review IP agreements with clients to confirm what code and products the company actually owns.

Ask for all client contracts and review them for IP ownership provisions, termination clauses, and any exclusivity arrangements. Find out what open-source components the codebase uses and whether any of those licenses create restrictions. Ask whether any clients represent more than 15% of revenue and what the relationship history looks like with those accounts. Confirm how the software is hosted, whether the infrastructure is documented, and whether any key systems are held in personal accounts versus company accounts.

Rejigg connects buyers with vetted software and technology businesses across a range of specialties. Browse software development businesses for sale on Rejigg and reach out directly to owners.

Look at renewal rates first, ideally by cohort year so you can see whether the trend is stable or declining. Then look at contract terms for the top recurring accounts, specifically whether any have change-of-ownership clauses that allow them to terminate. Talk to the seller about the history of each major account and who on the team manages those relationships. The strongest signal of durable recurring revenue is a combination of high renewal rates and account relationships that involve multiple team members, not just the founder.

A product company owns software it licenses or sells under its own brand, generating revenue that scales without proportional increases in labor cost. A custom development firm earns revenue by building software for clients, which is more time-intensive and less scalable but can still be highly profitable. Most buyers pursuing acquisitions prefer product companies or firms with a meaningful managed services component because those revenue streams are more predictable and the margins improve over time. The right choice depends on your background and what you want to operate.