L40° advised FirstPromoter, the affiliate marketing platform trusted by more than 2,000 SaaS companies, on its sale to SpringWater, an entrepreneur-led SaaS acquirer backed by the founders of Hostinger, NordVPN, and WebPros.
Founded in 2017 by Virgil Cioaca, FirstPromoter helps subscription businesses scale with automated affiliate and referral programs, seamless integrations, and robust reporting tools.
For SpringWater, this marks its debut acquisition. For Virgil, it marked his first exit, and the start of a new chapter for the company he bootstrapped from the ground up.
Key lessons for SaaS founders considering an exit
Drawing on this transaction, L40° Partner Manuel Amor highlights key takeaways for SaaS entrepreneurs preparing for an exit:
- Position metrics in the right context: While the company delivered strong EBITDA and growth. Retention metrics, typical of SME SaaS, could have been misinterpreted without context. L40° addressed this by targeting buyers familiar with product-led growth and SME SaaS, reframing churn dynamics appropriately, and emphasizing the platform’s specific value for subscription businesses. Future growth levers, such as leveraging platform data and expanding its affiliate marketplace, were also critical to highlight.
- Reduce founder dependence early: With a lean team, buyer confidence depended on showing the company could operate independently of its founder. Together with Virgil, we ensured responsibilities were delegated ahead of the process, a vital step given his preference for a short transition.
- Robust projections and tailored investor messaging: The company’s performance validated its forecasts during the process, reinforcing credibility. At the same time, L40° adapted the pitch to each investor, highlighting synergies specific to their strategy. Clean documentation and transparent communication built trust and smoothed diligence.
- Competitive tension drives value: Running a broad process resulted in multiple offers, which significantly improved both valuation and structure. By negotiating LOIs carefully, we avoided unfavorable terms such as binary or EBITDA-based earnouts, and secured the structure the founder wanted: strong upfront consideration and a short, defined transition.
- Mitigating diligence risks: As in any transaction, diligence raised challenges. L40°’s role was to protect value, keep negotiations balanced, and ensure the deal moved forward constructively despite hurdles.
- Supporting first-time founders: This was the founder’s first exit. Beyond managing the process, we made sure he was well prepared for management presentations, explained each step in real time, and ensured he felt supported throughout. Selling a company can be stressful, and part of our role is making sure founders know “we have their back.”
- Exit readiness is essential: Founders can maximize outcomes by preparing in advance: maintaining accrual-based financials, ensuring the team can operate without the founder, and protecting IP (e.g., trademarks, PIIAs). These steps increase buyer confidence and reduce execution risk.
The Outcome
- Founder objectives met: strong upfront consideration, minimal transition, and a partner aligned with FirstPromoter’s DNA.
- Value preserved and enhanced: a competitive process and careful positioning secured both valuation and structure.
Advisor’s Perspective
“Our role as advisors is to preserve value and create alignment between founders and buyers. In this case, it was about helping Virgil achieve the valuation, structure, and partner he wanted, while guiding him through every step of his first exit.
Manuel Amor, Partner, L40°
Founder’s Perspective
“For us, finding the right partner was about aligning with a team that respects the product’s DNA and sees the opportunity to take it global. With SpringWater’s experience and network, we have the best foundation for the next chapter.”
Virgil Cioaca, Founder, FirstPromoter
Contact L40° to explore how we can help you prepare, protect value, and maximize outcomes in your own exit process.
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