We evaluate SaaS companies across a small number of metrics, with emphasis on product strength, customer retention, capital efficiency, and market position.
Learn about our focused investment strategy.
While transactions are a part of the process, Lock 8’s primary focus is on creating enduring value–not on how soon we can sell a company. Leveraging our operating experience and expertise, we help our companies maximize their potential by partnering with leadership to implement thoughtful operational improvements and to nurture the development of a unifying organizational culture. Our role is to protect what’s working, strengthen what’s not, and leave things better than we found them.
First thing first, we seek to understand the product. Next, we focus on fundamentals–recurring revenue, gross-margin profile, customer retention, growth trajectory, and unit economics. We also spend a lot of time analyzing how we could help the business and what the resulting performance could be. Ultimately, we arrive at a valuation as a fair multiple of ARR or EBITDA. The majority of consideration is paid in cash at close, while providing you with the option to roll over a minority equity stake so you can share in the next chapter of value creation.
Control shifts to Lock 8, but collaboration remains central. We engage with founders in an open conversation around whether and how they would like to remain involved in the business. Lock 8 is open to a range of outcomes on this front; our main objective is to minimize disruption from a transaction/transition and to optimize the potential of the business to perform over time.
Capital is only the first ingredient. We bring decades of experience as operators, expertise in scaling SaaS businesses, a vetted network of cross-functional execs, and a proven, flexible, and holistic operational framework that we implement in concert with leadership. Expect weekly working sessions in the first 90-180 days to align the team on a value-creation roadmap, followed by cadence calls and on-site sprints as goals evolve. We roll up our sleeves and work next to leadership as partners throughout the entire process.
Once we have access to a focused data room, initial term-sheet discussions usually conclude within 3-4 weeks. Confirmatory diligence and legal documentation add another 6–8 weeks, meaning most transactions sign and fund in roughly 45–60 days. We control our own capital (we don’t have a fundraising committee), so timing is driven chiefly by the speed at which both teams can complete diligence.
Some useful info from Lock 8.