Four end-to-end walkthroughs for the parts of SaaS diligence that go wrong most often: finding churn the seller has not disclosed, turning raw metrics.revenue-quality score, catching valuation red flags, and pricing residual churn risk into the deal itself.
TL;DR: A proper revenue quality score weights 5 factors: revenue concentration (25%), logo retention (25%), churn trajectory (20%), inactive account ratio (15%), and MRR momentum (15%).
A proper revenue quality score weights 5 factors: revenue concentration (25%), logo retention (25%), churn trajectory (20%), inactive account ratio (15%), and MRR momentum (15%). This weighted composite catches risks that any single metric would miss. ChurnLens automates this scoring from raw billing data.
ChurnLens automates the analytical work behind these frameworks. Instead of building spreadsheets for each acquisition target, run a ChurnLens report and get instant revenue-quality scoring.
These guides are designed for SaaS acquirers, PE analysts, and founders preparing for exit. The frameworks apply across B2B and B2C SaaS, at deal sizes from $500K to $50M+.
TL;DR: The most common post-acquisition write-downs trace to: (1) Overstated NRR (including one-time services revenue), (2) Channel-partner churn hidden in direct-sales numbers, (3) 'New' MRR that's actually reactivated churned accounts, (4) Currency effects masking organic declines.
The most common post-acquisition write-downs trace to: (1) Overstated NRR (including one-time services revenue), (2) Channel-partner churn hidden in direct-sales numbers, (3) 'New' MRR that's actually reactivated churned accounts, (4) Currency effects masking organic declines. Technique: always request cohort-level data, not just aggregate metrics.
ChurnLens automates the analytical work behind these frameworks. Instead of building spreadsheets for each acquisition target, run a ChurnLens report and get instant revenue-quality scoring.
These guides are designed for SaaS acquirers, PE analysts, and founders preparing for exit. The frameworks apply across B2B and B2C SaaS, at deal sizes from $500K to $50M+.
TL;DR: Churn-based holdbacks are the most effective buyer protection in SaaS M&A.
Churn-based holdbacks are the most effective buyer protection in SaaS M&A. Structure: 20% holdback over 12 months, released quarterly based on actual churn vs. seller-represented churn. If real churn exceeds represented churn by >2 percentage points, the holdback reduces proportionally. This aligns incentives and surfaces hidden problems.
ChurnLens automates the analytical work behind these frameworks. Instead of building spreadsheets for each acquisition target, run a ChurnLens report and get instant revenue-quality scoring.
These guides are designed for SaaS acquirers, PE analysts, and founders preparing for exit. The frameworks apply across B2B and B2C SaaS, at deal sizes from $500K to $50M+.
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