6 surprising truths about SaaS due diligence

For most SaaS founders, the idea of an exit brings a mix of excitement and dread. The excitement is for the future; the dread is for due diligence. It’s often viewed as an intimidating, mysterious "black box" and a grueling process where a buyer’s sole mission is to find every flaw in your company.

But what if that perception is wrong? What if due diligence is less about interrogation and more about conversation? Here are six counter-intuitive truths that reframe due diligence from a painful audit into a strategic conversation about what’s next.

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1. Start with your personal "Why”

The common assumption is that an acquisition discussion begins and ends with metrics: ARR, churn, and growth charts. Buyers, you're told, only care about the "what", as in what your company has achieved.

In reality, the most critical starting point is the founder's personal "why." A successful exit isn’t just about the multiple; it’s defined by the founder’s happiness and future plans. Are you burnt out and dreaming of a clean break? Or are you eager to stay involved and scale the company with more resources? Your personal goals are the foundation of the entire conversation.

"What do you actually want to do? How does the dream exit look to you? We truly recommend you to make it the centerpiece of your exit strategy."

— Anna Nadeina , Head of Growth at saas.group

This founder-first approach is essential for ensuring alignment and building a healthy partnership from day one. It prevents mismatched expectations, like offering a two-year earnout to a founder who is ready to move on. When your personal vision is clear, it’s much easier to find a partner who can help you realize it.

2. It’s a mutual Interview, not a one-way interrogation

Founders often feel like they’re putting their business under a microscope during due diligence, bracing for intense scrutiny. This one-way perspective misses a crucial truth: the process is a two-way street. While the buyer is evaluating your company, you should be evaluating the buyer.

This period is your opportunity to learn about the buyer’s culture, values, and operational style. How they handle questions and challenges reveals their character as a long-term partner.

Shift your mindset from being a passive subject to an active participant. This mutual evaluation isn't just about culture; but making sure the perception of your product is not of a finished artifact, but as a foundation for future growth. 

3. Buyers are looking for potential, not perfection

Product due diligence can be a source of major anxiety. Founders worry that every bug, missing feature, or imperfect process will be exposed and used against them. But the goal isn’t to find a flawless company or deliver a simple "yes" or "no" verdict.

The real objective is to understand if the team is skilled enough to create "new success stories again and again and again." Identified issues are rarely deal-breakers. In fact, they are often seen as the first collaborative projects you might tackle together after an acquisition. It’s about assessing the foundation and the dynamic capability of the team for future innovation, not demanding a perfect track record.

"No company is perfect, and due diligence isn't about finding flaws. It's about identifying opportunities and risks. I can usually identify with high confidence what is not working. These are the things we look for, but they are not red flags. They are the first potential projects we’ll have together."

— Daniel Thulfaut , Head of Product at saas.group

This focus on future potential means that how you handle the discovery of those inevitable issues is more important than the issues themselves.

4. Hiding tech issues might be a bigger mistake than having them in the first place

Technical due diligence is often the most feared part of the process, especially for technical founders who know where every shortcut was taken. The instinct is to scramble and try to fix years of technical debt in a matter of weeks.

The most counter-intuitive advice? Don’t. Radical transparency is far more valuable than last-minute patches. Buyers expect to find issues. The process is designed as a peer-to-peer conversation to understand the history and rationale of your tech stack. Attempting to hide a known problem does more than just erode trust; it signals a lack of professional maturity and turns a potential collaborator into an adversary. It prevents the constructive problem-solving that should be happening.

"if you did something you think you have to correct, then you rather just leave it that way. And don't try to hide things. Be very transparent. And then it's a nice conversation. Otherwise it might turn out nasty."

— Tobias Schlottke , Co-founder and Partner at saas.group

Openly discussing challenges builds trust and demonstrates realistic understanding of your technology. It shows a potential partner that you’re capable of identifying and addressing challenges which is every partner’s dream. 

5. "UX debt" is real, and it can stall your growth

When founders think about "debt," they usually think about code. But there’s another, often overlooked, form of debt that can be just as damaging to growth: user experience debt.

This "UX clutter" accumulates over time. As Daniel, our Head of Product, notes, "every new button dialog or option makes the software a little bit more complex." While "companies often pride themselves on the sheer amount of edge cases they support," the reality is that many of these features are "only used by a handful of customers." That long feature list, once a source of pride, can become a significant drag on the user experience.

This clutter can become a "serious issue when wanting to drive stronger product-led motion, or often when trying to go international." For founders, recognizing and addressing UX debt is crucial because it highlights a hidden friction point that could be quietly stalling your growth.

6. Your financials tell a story

Financial due diligence isn't a cold audit designed to catch you out. It's a process of building mutual trust by understanding the narrative behind the numbers. As Chris Knaup from our M&A team explains, the primary goal is to build confidence and "craft a narrative to the numbers." 

Each question is an opportunity to demonstrate transparency. As Chris notes, "Each question isn't an accusation. It's part of building understanding." A clear, well-documented financial story is the fastest way to build a buyer's confidence. Conversely, one area where a simple mistake can have massive consequences is inaccurate revenue recognition.

For example, if a customer pays $1,200 for an annual plan in January, you should only recognize $100 per month. Booking the full amount at once inflates your ARR. Since valuations are often based on ARR multiples, this "small accounting mistake could cost you hundreds of thousands of dollars." Getting your financial story straight isn’t just about accuracy but the ultimate demonstration of credibility and trustworthiness. 

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Due diligence doesn't have to be a black box. The process is fundamentally a human one. It's about ensuring mutual fit, being transparent about challenges, and aligning on a shared vision for the future. The most valuable assets a founder can bring to the table are not a perfect company, but a prepared mindset and an open, honest approach. With that foundation, an exit can be a truly successful and stress-free next step.