Anar Volset, founder of Discretion Capital, explains which five AI moats private equity buyers now require before considering SaaS acquisitions between $2-20 million ARR.
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Hardware-software coupling, marketplace network effects, and communication graph embeds create defensible moats that make API swaps insufficient for competitors to replicate your product.
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Proprietary data with closed feedback loops matters only when data flows in but cannot leak out via APIs, preventing competitors from replicating your advantage through vibe coding.
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Some PE firms now refuse to show their investment committees any SaaS business lacking at least one of these five moats, raising acquisition hurdles significantly since early 2026.
"If you have none of these, they won't even show their investment committee." - Anar Volset