M&A & Diligence Support for SaaS Companies
SaaS diligence is two audits wearing a trench coat: one on your revenue quality, one on your code and contracts. A buyer will spend weeks deciding whether your ARR is as real and as sticky as the deck claims — and whether you actually own the software you're selling.
What diligence actually feels like
Under a letter of intent, the buyer's team sends request lists covering financials, tax, customer contracts, the ARR build, cohort data, and technical and security documentation — wanted fast, organized, and internally consistent. If your ARR number changes depending on who calculates it, that inconsistency becomes the buyer's first lever.
You're still shipping product and closing customers while this runs. SaaS deals stall when the revenue data and the contracts don't line up, or when technical diligence surfaces surprises. A buyer reads either as risk and prices it in.
M&A support is the finance seat that runs the data room, defends the revenue metrics in the buyer's language, and keeps the deal moving while you keep building.
The SaaS deal-killers hiding in plain sight
Buyers focus on SaaS-specific risks. Does ARR tie to signed contracts with a consistent definition, and does net revenue retention hold up in real cohorts? Is revenue recognized over the subscription term rather than on payment? Do customer contracts contain change-of-control clauses that let them walk on a sale? Who owns the IP — was all contractor and employee code properly assigned, and is the open-source usage compliant?
They'll expect artifacts founders often lack: a defensible ARR bridge, cohort retention, deferred-revenue schedules, IP assignment records, and a security and data-privacy posture. Prepared, these justify a revenue multiple. Missing, they invite a discount or a broken deal.
We build and defend the ARR bridge and retention data, correct revenue recognition, coordinate IP and security diligence with your attorney and technical team, and have the answers ready — so diligence confirms your revenue quality instead of repricing it.
How Kaizen runs it
We build and manage the data room, tie ARR to signed contracts, defend net revenue retention and cohort data, correct deferred-revenue recognition, defend add-backs, model the working-capital peg, and coordinate with your attorney, banker, and technical team so finance never stalls the deal. One point of contact owns every number the buyer questions.
We're named after continuous improvement, which in a SaaS deal mostly means locking down one ARR definition so the number doesn't change every time someone new opens the model.
What's included
- Data room built and managed: financials, tax, customer contracts, technical docs
- ARR tied to signed contracts with a single defensible definition and bridge
- Net revenue retention and gross/logo churn defended with cohort data
- Deferred-revenue recognition corrected to match the subscription term
- Change-of-control clauses in customer contracts identified and flagged
- IP ownership, contractor/employee assignments, and open-source compliance verified
- Working-capital peg modeled and the closing true-up negotiated
- Coordination with your M&A attorney, banker, and technical diligence team
Pricing
Straight answers
My ARR number depends on who's calculating it. How bad is that?
Bad enough to be the buyer's opening move. Without a consistent definition tied to signed contracts, the buyer builds their own — smaller — number. Locking down the ARR definition and bridge is the first thing we do, because the entire valuation hangs on it.
What are change-of-control clauses and why do they matter?
They're contract terms that let a customer renegotiate or exit when the company is sold. If your biggest customers have them, a buyer sees revenue that could evaporate at closing. We identify them early so you and your attorney can address them before they become a deal issue.
Can you help me acquire a SaaS company?
Yes. Buy-side, we test the target's ARR definition, retention cohorts, revenue recognition, and contract risk, and coordinate technical and IP diligence — so you know what you're buying before you commit.
We have a finance lead already. Do we need this too?
If your finance lead has taken a company through an exit and can run full diligence alongside their day job, maybe not. If this is the company's first process, that experience gap is exactly what we cover.
Related
Free 20-minute books assessment
We'll show you the five things we'd fix first in your books — useful whether you hire us, hire someone, or do neither.
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