Exit Planning for SaaS & Tech Founders

When to Start Preparing

The companies that achieve the best exit multiples start preparation 18 to 24 months before going to market. This is not about finding a buyer - it is about building the business that a buyer wants to pay a premium for.

What Buyers Examine in Due Diligence

Every acquirer - whether a trade buyer, private equity firm, or strategic investor - will scrutinise the same core areas. Getting these right before going to market is the difference between a smooth transaction and a failed sale.

• Revenue quality and recurring revenue split. Investors prioritise predictable, recurring revenue over one-off sales. Your financial reports must clearly separate MRR and ARR from implementation fees and one-time licence sales. A clean MRR schedule that reconciles to your P&L is essential.
• Customer concentration. If more than 20% of your revenue comes from a single customer, it is a material risk. A fractional CFO can help you build a healthier mix by identifying growth areas and adjusting go-to-market strategy well before the sale process begins.
• Deferred revenue and revenue recognition. Upfront annual payments create deferred income on your balance sheet. This must be recognised correctly under FRS 102 / IFRS 15 - monthly over the service period. Getting this wrong creates misstatements that surface during due diligence.
• Churn and net revenue retention. Buyers want gross revenue retention above 85% and net revenue retention above 100%. Tracking these by cohort gives buyers confidence in the durability of your revenue base.
• Profitability benchmarks. SaaS businesses should target gross margins of at least 70%. Reaching EBITDA profitability - even modestly - at least 12 months before exit signals operational maturity and commands higher multiples.
• Clean, auditable data. Three to five years of monthly management accounts, a well-organised chart of accounts, and a clean financial structure make due diligence faster. Messy data extends timelines and often kills deals.

What Drives SaaS Valuations

SaaS businesses are typically valued on a multiple of ARR. The multiple depends on growth rate, retention, margins, and market position. For current benchmarks, see our SaaS Valuation Multiples 2026 guide.

How a Fractional CFO Prepares You for Exit

Exit preparation is where a fractional CFO delivers the highest return on investment. The work done in the 12 to 18 months before a sale directly impacts the final valuation - often by hundreds of thousands of pounds.

• Build a vendor due diligence pack that answers buyer questions before they ask
• Clean up the chart of accounts and ensure revenue recognition is FRS 102 compliant
• Produce trailing-twelve-month management accounts with variance commentary
• Create a financial narrative highlighting growth levers and margin improvement
• Model scenarios showing buyers what the business looks like with additional investment
• Manage the financial workstream during the transaction, freeing the founder to run the business
• Review completion accounts and negotiate working capital adjustments