Why Most Digital Acquisitions Disappoint (And How to Spot a Winner)

The digital acquisition market is facing a quality crisis. After spending the last three years actively acquiring and selling digital assets, I’ve noticed some fundamental problems with how this market operates. However, there is also a tremendous opportunity for those who know where to look.

Lack of quality deal flow

The public marketplace scene has become a graveyard of expired trends. Just look at what’s happening right now — marketplaces are flooded with AI wrapper applications, mostly built in the last twelve months, trying to catch the AI wave. Before that, newsletters, crypto and dropshipping stores dominated listings in their respective eras.

This cycle reveals a crucial problem: by the time these businesses hit the market, the opportunity has usually passed. The seller has likely noticed declining returns and wants to exit before things get worse. It’s like trying to sell an umbrella after the rain — you might find a buyer, but they’re probably not going to get much use out of it.

Related: You Bought an Online Business. Now What?

There is also the growing trend of “acquisition builders” — entrepreneurs who specifically build businesses to sell them quickly. These operators often create superficially attractive businesses optimized for marketplace metrics but lacking in substance. They might show good revenue numbers, but dig deeper, and you’ll find minimal customer loyalty, high churn rates and shaky foundations.

Self-sabotaging dynamics

Unlike physical businesses, where an owner might sell because they’re moving cities or retiring, digital businesses don’t face the same constraints. A profitable online business can be run from anywhere, often with minimal time investment. Need to move? Hire a remote team. Too busy? Bring in a fractional CEO. The flexibility of digital operations means healthy businesses rarely need to sell.

This creates a troubling dynamic: when you see a promising digital business for sale, you have to ask yourself — why? Unless it’s a premium private deal, the answer often reveals underlying problems.

The selling process itself creates another barrier. I recently spoke with a founder who spent nine months trying to sell his SaaS business. By the time he found a buyer, his metrics had declined because he had spent more time on the sale than on the business. This isn’t uncommon. Pursuing an acquisition often becomes a full-time job, which means those who commit to the process usually have a pressing reason to exit.

The marketplace dilemma

Public marketplaces face their own structural challenges. They need standardized valuation methods to serve a broad audience, which usually means focusing on revenue multiples. This one-size-fits-all approach fails to capture the nuanced value of pre-revenue or IP-driven startups. This is not to blame the marketplace; it is simply a trade-off to satisfy the masses.

For instance, I once acquired a highly established but pre-revenue directory that provided me access to a growing network of newsletter creators through its submissions. No marketplace could properly value it because there was no revenue to multiply. However, it was invaluable to me as I still leverage that same network to solve the chicken-and-egg problem for an ad network we are launching. These kinds of strategic acquisitions often don’t make sense within the marketplace framework as most other buyers would not derive the same value as I have.

Related: 5 Essential Questions to Ask Yourself Before Buying an Online Business

Why there is still hope

Despite these problems, the digital acquisition market is becoming more interesting than ever. The barriers to building digital products are falling rapidly, with tools like Lovable that turn a simple prompt into a functional MVP. This democratization of development means we will see more digital products launching — and more opportunities for acquisition.

However, as building becomes easier, the value increasingly lies in existing assets — established user bases, proven distribution channels and accumulated data. Instead of spending heavily on social media ads to build an audience from scratch, smart operators are looking to acquire existing projects in their target niche.

The digital M&A scene is also maturing. Many technical founders are realizing they enjoy building products more than running businesses. When we reach out to interesting projects that aren’t officially for sale, we almost always find founders open to acquisition discussions. Everything has a price, and more founders are recognizing acquisition as a viable exit strategy.

This openness coincides with the fact that running a digital business is becoming increasingly manageable. Modern tools have simplified operations to the point where some are betting that we’ll see the first one-person unicorn soon. This operational efficiency makes acquisitions less daunting, which opens the market to more potential buyers.

Related: Challenges You Will Face Before Starting Your Business Online

Moving forward

The only way to capitalize on this market lies in understanding its limitations. The best opportunities rarely appear on public marketplaces. Instead, they are found through networks, direct outreach and industry relationships. Smart acquirers are building expertise in specific niches and approaching potential acquisitions before they hit the market.

For sellers, the focus should be on building sustainable businesses rather than optimizing for a quick exit. Paradoxically, this approach often leads to better acquisition outcomes, even if selling wasn’t the initial goal.

The digital acquisition market may be broken in its current form, but for those who know where to look, it presents more opportunities than ever.