Startups For the Rest of Us

Episode 836 | The 5 A.I. Moats Acquirers Value Most

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Is your SaaS actually protected from AI disruption, or are acquirers walking away without even looking?

In this episode, Rob Walling talks with Einar Vollset of Discretion Capital for a front-lines SaaS M&A market report, covering how the acquisition climate has shifted since 2021, why some PE firms now require at least one AI moat before they'll even look at a deal, and a breakdown of all five moats: hardware-software coupling, two-sided network effects, communication graph embeds, proprietary data with closed feedback loops, and operational switching costs. 

Topics we cover:
  • (2:05) – State of SaaS M&A from 2020 to today
  • (5:49) – Why 2021 was the best time to sell
  • (7:38) – How the 2022 downturn raised the acquisition bar
  • (8:59) – The SaaS apocalypse narrative and AI FUD
  • (12:26) – Why bootstrappers should care about exit markets
  • (15:52) – AI moat #1: Hardware-software coupling
  • (17:38) – AI moat #2: Marketplace scale and two-sided network effects 
  • (20:05) – AI moat #3: Communication graph and relationship embed
  • (21:27) – AI moat #4: Proprietary data with closed feedback loops
  • (23:20) – AI moat #5: Operational embed and switching costs
  • (27:28) – Some PE firms now require at least one moat
  • (29:23) – AI-native SaaS faces even higher hurdles
    • Links from the show:
    • MicroConf Connect Next Live Session: Jim Zarkadas on User-Friendly Onboarding (June 17) 
    • TinySeed
    • MicroConf YouTube
    • The SaaS Playbook
    • Discretion Capital M&A Guide
    • Fiscal.ai 
    • DealForma
    • BuiltWith
    • ZyraTalk
    • EverCommerce 
    • Einar Vollset (@einarvollset) | X

      • If you have questions about starting or scaling a software business that you'd like for us to cover, please submit your question for an upcoming episode. We'd love to hear from you!

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      Startups For the Rest of UsBy Rob Walling
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