What to Ask the Seller Before Buying Their SaaS Platform
The questions that reveal whether a SaaS is worth buying — before you sign anything.
Before signing any letter of intent, ask the seller a precise set of questions that expose churn, revenue quality, and post-sale support gaps that financials alone never show.
Financial and Growth Reality
Request the last 24 months of monthly recurring revenue broken down by new vs. expansion vs. churned ARR. Sellers on platforms like Acquire.com and hades.ae routinely present blended 3.2x ARR multiples in 2026, yet only 40 % of those listings disclose net revenue retention above 95 %. Ask specifically for the cohort chart showing MRR retained at month 12 and month 24; a drop below 85 % signals future valuation compression at exit.
Customer Concentration and Churn
Find out the exact percentage of revenue coming from the top five customers. If any single account exceeds 12 % of ARR, negotiate an escrow holdback of at least 15 % of the purchase price for 12 months. Demand the raw churn data: logo churn and net dollar churn for each quarter since 2024. A sustained net dollar churn above 7 % usually caps resale multiples at 2.8x or lower on Empire Flippers and MicroAcquire.
Product and Technical Stack
Ask which code repository hosts the production branch and whether the seller will transfer all Git history and deployment keys at closing. Confirm the current tech stack, including cloud provider, database size, and any third-party services that would require re-contracting under new ownership. Sellers who built on legacy frameworks frequently disclose migration costs of $40k–$120k post-acquisition.
Support Load and Team Transition
Request the average first-response time and ticket volume for the past six months. If the founder is the sole support person handling more than 35 tickets per week, budget for an immediate customer-success hire at roughly $85k fully loaded. Clarify the exact scope of the transition agreement: will the seller remain available for 60 days at no extra cost, or is an APA clause requiring paid consulting at $250 per hour?
Legal, Compliance, and Data Risks
- Confirm SOC 2 or ISO 27001 status and whether any audit findings remain open.
- Ask for the full list of data-processing agreements and any GDPR or CCPA complaints filed in the last 24 months.
- Verify domain ownership, trademark registrations, and any open-source license obligations that could trigger relicensing fees.
How many months of financials should I review before making an offer?
At minimum 24 consecutive months of P&L and MRR statements, ideally 36, to spot seasonality and post-pandemic normalization trends still visible in 2026 data.
Should I request an exclusivity period after signing the LOI?
Yes. Most advisors on FE International recommend 45–60 days of exclusivity so you can complete technical, legal, and customer diligence without competing bids inflating the final price.
What escrow percentage is standard for SaaS acquisitions under $2M?
Market practice on hades.ae and Acquire.com is 10–20 % held in escrow for 12 months, with release tranches tied to revenue retention and absence of undisclosed liabilities.
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