Building SaaS companies is hard. Scaling them is even harder. Few people know this better than Tim Schumacher, co-founder of SaaS.Group. In just under eight years, Tim and his team have acquired 25 SaaS businesses, building a portfolio that generates over $80 million in annual recurring revenue (ARR).
This isn’t a story of flashy venture funding or billion-dollar bets. It’s a story of discipline, smart operations, and learning from every deal. Here’s what founders and operators can take away.
1. A Clear Playbook for Acquisitions
SaaS.Group buys profitable SaaS businesses in the $1–10 million ARR range. That’s their sweet spot. They avoid bloated organizations with big sales teams and instead look for product-led companies with sticky users.
Tim sums it up simply:
- ARR stability matters more than hype.
- Profitability and efficiency trump top-line growth.
- Churn is a dealbreaker. A business adding 60% new customers but losing 50% each year isn’t sustainable.
Their focus? Small, essential tools people keep paying for—marketing software, developer tools, productivity apps. Not glamorous, but mission-critical.
2. The Rule of 40
Once a company joins the portfolio, SaaS.Group uses a simple guiding principle: the Rule of 40.
That means EBITDA margin + growth rate ≥ 40%.
A business might run at 20% margins while growing 20% a year—or run at 40% profit with little growth. Either is fine. What doesn’t work: chasing growth at all costs.
This rule keeps teams focused on sustainable growth instead of vanity metrics.
3. A People-First Approach
Tim is clear: acquisitions succeed or fail based on people. Founders often sell because they’re burned out or simply want to move on. The challenge is finding the next leader.
SaaS.Group looks for:
- Second-in-command talent ready to step up.
- Technical builders who can lead products, not just manage.
- Leaders who thrive in remote, transparent environments.
To support them, SaaS.Group runs bi-annual performance reviews, leadership training, and even stock appreciation rights so managers feel like owners.
4. Centralized Services, Decentralized Products
Every portfolio company is different, but many challenges are the same. That’s why SaaS.Group centralizes functions like finance, HR, recruiting, and marketing best practices.
At the same time, each product team runs independently. They own their roadmap and customer relationships. The balance: freedom where it matters, structure where it saves time.
Tim calls it building an industrialized playbook—a repeatable system that scales across dozens of companies.
5. Focus on the Path, Not the Exit
Unlike many acquisition firms, SaaS.Group doesn’t obsess over IPOs or billion-dollar exits. Their philosophy is simple: enjoy the journey.
They set milestones—like crossing $100 million ARR—but they aren’t chasing headlines. Tim’s advice to founders:
- Don’t obsess over exits.
- Build for efficiency.
- Stay bootstrapped as long as you can.
“Life is too short to have a miserable business,” he says.
Resources for Founders
Want to dig deeper into SaaS.Group’s journey and lessons? Here are some starting points:
📧 Contact Tim – tim@saas.group
💼 SaaS.Group – Acquiring profitable SaaS companies
📚 Book Recommendations:
- Humanocracy
- Traction
🌱 Side Project – Ecosia.org, a green search engine that plants trees with ad revenue
🎧 Explore the Podcast – Dive into the full conversation for more stories and insights.
