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Due Diligence8 min readMar 3, 2026

How to Evaluate a SaaS Business Before Buying: 7 Critical Metrics

Due diligence is the shield that protects buyers from acquiring troubled assets. When reviewing a SaaS business for sale, you must dissect both financial performance and technical architecture to verify that historical revenue is repeatable under your ownership.

The Essential SaaS Diligence Checklist

When analyzing an acquisition target, work through three core pillars: financial integrity, technical health, and customer satisfaction.

Start by reconciling Stripe gross volume with the seller's reported bank deposits. Ensure that annual plan sales are amortized properly across 12 months rather than booked as single-month windfalls.

Checklist & Key Actions
Audit MRR vs ARR and confirm annual-plan accounting
Calculate Gross Revenue Churn and Net Revenue Churn
Verify Customer Acquisition Cost (CAC) and payback period
Audit source code for third-party copyright issues
Check Google Analytics for organic traffic authenticity
FREQUENTLY ASKED QUESTIONS

What is an acceptable churn rate for a micro-SaaS?

For B2B SaaS, monthly churn between 2% and 5% is standard. For B2C apps, churn is typically higher (5% to 8%). Anything consistently above 10% monthly churn indicates product-market fit issues.

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