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How to Prepare for Due Diligence Before Selling Your Tech Business

You’ve finally got a buyer on the hook. Maybe it’s a strategic acquirer that loves your SaaS product, or a private equity fund that sees potential in your e-commerce brand. The term sheet is signed, champagne corks are almost popping… and then, it hits:

Due diligence.

If the deal process is a marathon, due diligence is mile 20—grueling, detail-heavy, and the point where many founders stumble. But it doesn’t have to be that way.

We’ve helped hundreds of founders sell their online businesses, and if there’s one consistent truth it’s this: how you prepare for due diligence can make or break your exit.

Here’s what you need to know—and do—before DD starts.

1 – Know What Buyers Are Actually Looking For

Buyers aren’t just checking your numbers. They’re looking for confidence—in your financials, your tech stack, your contracts, and your ability to scale without blowing up.

Here’s what’s on their checklist:

  • Financials: Revenue consistency, profitability, retention, CAC, LTV, and margin per customer.
  • Product & Tech: Code documentation, security, IP ownership, and platform scalability.
  • Legal: Contracts, compliance, and any skeletons in the litigation closet.

Think of due diligence like an X-ray. Everything you’ve done—good, bad, or messy—will show up. So your job before DD starts? Make sure there are no surprises.

2 – Organize Like a Pro (Not Like a Founder)

Let’s be real. Most founders run lean. Docs are scattered across Google Drive, Slack, Notion, email attachments—and maybe one sacred desktop folder titled “IMPORTANT.”

That’s not gonna fly in DD.

What to do:

  • Set up a clean dataroom with labeled folders: 1. Financials, 2. Legal, 3. Product/Tech, 4. Operations, etc.
  • Use a due diligence checklist to make sure nothing’s missing. (Seriously—don’t wing it.)
  • Prepare backups and clean versions. If you wouldn’t show it to your accountant, don’t show it to a buyer.

A well-organized dataroom screams, “We’re serious, we’re ready, and we know what we’re doing.”

3 – Clean Up Your Financials—And Know the Story They Tell

If your P&L looks like a junk drawer—half-filled rows, Stripe screenshots, and Shopify exports—it’s not just a bad look. It’s a deal killer.

Buyers want:

  • Three years of clean, monthly P&Ls (or at least 24 months).
  • Revenue broken down by product, customer type, and region.
  • CAC, LTV, churn, and retention metrics.
  • Gross and net margin per product or segment.
  • Forecasts that actually tie back to historical data.

Bonus points if you can explain any weird dips or spikes. (Pro tip: they’ll find them, so don’t try to hide anything.)

What happens if you don’t? At best, buyers will get nervous and lower the valuation. At worst, they walk.

4 – Don’t Let Tech Be the Weak Link

This one hits SaaS founders especially hard. Buyers will poke deep into your product architecture and ask questions like:

  • Is your tech stack scalable?
  • Is the code documented?
  • Are there security vulnerabilities?
  • Who owns the IP?

If you’re still running on outdated libraries or you “kind of” own your IP because your dev contractor never signed anything—fix it now. Buyers hate risk, especially in software and e-commerce infrastructure.

What to do:

  • Document everything. Clean code. Clear version control.
  • Patch security gaps and run an audit.
  • Confirm IP ownership. Get every contractor agreement signed and sealed.

If it’s not defensible, it’s not valuable.

5 – Legal Gaps Are Like Landmines

You wouldn’t believe how many deals stall (or blow up) over legal paperwork.

Things that scare buyers:

  • Unclear or unsigned customer or vendor contracts.
  • Open legal disputes or unresolved complaints.
  • Weak IP protection (no trademarks, no licensing clarity, etc.)

It doesn’t matter how great your metrics are—if your contracts are a mess, your deal is at risk.

What to do:

  • Have a lawyer review your major agreements before going to market.
  • Disclose anything pending (better to explain it upfront).
  • Make sure you’ve locked down your IP—this is especially critical for tech and e-commerce brands.

Remember: surprises in DD don’t just reduce trust. They reduce the check size.

6 – Think Like a Buyer, Not a Founder

If you’ve been running your business in “hustle mode,” you’re likely used to making fast decisions, cutting corners, and wearing every hat. But buyers don’t want hustle. They want predictability. Systems. Proof.

Before you enter due diligence:

  • Document key processes (marketing, ops, tech).
  • Show that the business runs without you (or at least could).
  • Diversify customer acquisition (buyers hate channel dependence).
  • Build a 12–24 month forecast based on real data.

Your goal isn’t just to survive due diligence. It’s to come out looking like a machine—one they can confidently invest in.

Final Thoughts: Prepare Early or Pay Later

Due diligence isn’t the time to get your house in order—it’s the inspection that determines if the house is worth buying at all.

Start preparing before you go to market. Fix your financials. Clean up your legal. Systematize your ops. Document your tech. Organize your dataroom.

The more buttoned-up you are, the smoother your deal—and the higher your valuation.

Thinking of selling your tech business?

We help SaaS and e-commerce founders prepare, price, and position for premium exits. Book a free strategy call with our M&A team and let’s talk about getting your business due-diligence-ready.

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