Technology & Digital Businesses · Buyer guide
Buying a B2B SaaS business
Published · Reviewed by The Diligence Standard Team · Updated
a B2B SaaS business can look attractive on a summary P&L while the operating details underneath it change the cash flow, transferability and capital a buyer will actually own. Diligence should connect the reported earnings to the business-specific drivers that create them.
How the business works
ARR quality, gross retention, net retention, CAC efficiency, product dependence, code/IP ownership and founder-led sales determine value.
Risks to test
- Founder-led sales/product
- Customer concentration
- Churn masked by new bookings
- Technical debt
- IP/contractor ownership
- Cloud/security exposure
Evidence to request and reconcile
- Subscription cohorts
- Billing data
- Customer contracts
- CRM pipeline
- Code/IP assignments
- Cloud/security architecture
Decision questions
- What ARR is truly recurring?
- What churn exists by cohort?
- Who owns code/IP?
- How dependent are sales/product on founder?
- What technical/security debt exists?