Can a foreign corporation (similar to an LLC) qualify for an SBA 7(a) loan to acquire businesses in the United States?

If it's generating USD $10,000 or more in MRR, then you can try listing if on ExitRound but based on your description, I think a sale at this moment is unlikely. Acquisitions like the one you're dreaming are either motivated by the book of business or an engineering team. Code is thrown away and product discontinued. So the idea that a business is going to buy you to fix the problems of the product is unrealistic. Happy to talk to you to help you determine if the business is potentially salvageable.

I started my last company and grew it with $20,000 to $12 million in 10 years. And while I was in the early phases, I did put in on my resume.. So, I believe you should. If it is a registered business entity and you are working it, it is still what you are doing, regardless of revenue of the company. If you are performing the tasks in your position, it shows you have been attempting to launch as well as (hopefully) prevents any gaps in employment. It also shows a level of commitment to your venture. We specialize in assisting startups with business plans and structure, so fee free to contact me for additional questions.

Generally speaking - having access to more capital is a good thing - particularly when you aren't hemorrhaging equity to get access. Have you talked to the bank about closing on your "need" amount, and having them convert the remainder into a line of credit? Beyond that - this really comes down to a few loan terms, and some math. How does it impact the payment? Are you comfortable with the payment on the higher amount? How does it change your break even point at the cash flow level? Are there prepayment - early payment penalties? If so, are they worth the additional capital in the event you don't utilize it and want to pay it down? How is the loan interest calculated? Is it simple interest or amortized? In the case that its simple interest, you'll pay that interest regardless, because its rolled into the loan from the start. In any event - best of luck with the upcoming launch and solving the marketing challenge! Happy to help you dig into that further! Ryan Rutan

Q) What info would a buyer need in order to make an offer? Unsolicited offers rarely start out as offers. They start as conversations. Cold inbounds from potential acquirers are usually done to establish some facts and also willingness to entertain an offer. They need to have enough information to form a rationale (i.e. explanation as to why it makes sense to the acquiring company) and enough confidence that there is interest by the seller. Q) Would that info need to be verified or can an offer be made on the condition of verifying later (if the conversation gets serious)? A) Offers are always conditional. There is a delicate balance between knowing how much to disclose and when to disclose information, versus trying to force more commitment on the part of the potential acquirer. Q) What is a general rule of thumb (formula?) for how to valuate a SaaS business? A) Depends on the size and business of the acquirer. The smaller the acquirer (especially where its valuation is $100m or less), the more it becomes a relative valuation argument (what do we have and what do you have), but the larger the acquirer it is typically a talent acquisition model where the business dynamics are less important to what the team has demonstrated it can do and the perceived value that that team can make internally. This is even more true when the target (you) is generating less than $5m ARR on a trailing basis. Finally, you phrased this question as "how would one go about entertaining an offer to buy my company?" so let me speak to a few general rules. 1) If you're willing to sell, be polite, efficient and courteous to any potential interest. 2) Quickly qualify who you are dealing with and their ability to make a decision (are they junior and just doing research or are they VP Corp Dev?) 3) Quickly establish mutual interest in a desire to dive deep, and get them to explain their process including other decision-makers etc. 4) Ensure that you have competent legal counsel who has significant experience in M&A, ideally with the buyer you're talking to. 5) *GET A TERM SHEET*. You have nothing until you have a term sheet and even then, you don't have a deal. 6) As soon as you have a term sheet, begin aggressively marketing your Company to other potential acquirers. 7) Try and put the impact of the financial outcome aside for a moment (very hard to do) and begin evaluating your suitors based on who you really want to work for over the next 3+ years. Do your due diligence on this question as much as possible. 8) Don't take your eye off the business or celebrate the deal until it's done. I've seen too many friends celebrate prematurely only to see the deal die or radically change at the last minute. Happy to talk through this in a call with you in more detail.

As you may know, we acquired Clarity recently and have done numerous acquisitions at Startups.co so we spend a lot of time thinking about this. I've also personally been acquired a few times so I've been on both sides. With that said I think the earlier comment about how much value you can bring to the acquirer is always a great place to start. For example, if your company had $100k in sales per year, no reasonable multiple of that is going to get you into a meaningful acquisition price. So scratch that. Instead - try to determine what kind of revenue the acquirer might generate in the first and second year post acquisition. That at least gives you a starting point. What you can't do is start thinking about what Instagram sold for. None of that type of silly math matters. Those are one of conditions where a company is in such hot demand is so singular in it's value (no one else was that big at that time in that particular segment) that they play by entirely different rules. What's nice about the 'what value can we bring' discussion is that it shows that you are thinking about what's in it for them, not just what's in it for you.