A 26-52 week sell-side M&A preparation engagement for $10M-250M ARR B2B SaaS founders running a competitive auction process. Eight modules cover Readiness & Cleanup (sell-side QoE, KPI pack, contracts, key-person succession, pipeline hygiene), Banker Selection, Marketing Materials (Teaser / CIM / Operating Model / Mgmt Deck / 210-line VDR), Buyer Outreach & NDAs, IOIs & Management Meetings, LOIs / Exclusivity / Confirmatory Diligence, Definitive Agreement / RWI / NWC Peg & Close, and Founder Liquidity & Tax Planning (QSBS + trust stacking + state residency + post-close portfolio). T2D3-IP-heavy: CIM Pain-Claim-Gain narrative, 210-line VDR index, 75-question Q&A bank, 6-tactic retrade-defence runbook, LOI anchor-to-IOI redline, milestone exclusivity, trust-stacking strategy. Reference methodology: investment-banker process docs, a16z 16 metrics, Bessemer State of the Cloud, SaaS Capital benchmarks. https://softwareequity.com/confidential-information-memorandum. Total scope: 8 modules, 30 sections, 112 tasks, 587 hours of canonical effort.
Stand up a buyer-ready baseline by clean-up week 8: sell-side QoE done, KPI pack in shape, contracts standardised, key-person succession mapped, pipeline hygiene scored via inherited sales-methodology artefacts. Triggers banker selection (M2) and CIM authoring (M3). Module covers sell-side QoE, a16z-aligned KPI pack with cohort retention, contracts standardisation and legal cleanup, key-person succession and stay-bonus design, and pipeline hygiene + forecast-accuracy track record (cross-ref hub for sales-methodology).
Engage QoE firm, define scope (12 add-back categories + SaaS-specific normalisations), prep data pack, run walk-through fieldwork, finalise QoE report. Gates banker selection and CIM authoring downstream.
Select sell-side QoE firm (Big-4 vs middle-market specialist)
A sell-side Quality of Earnings (QoE) report is the single highest-leverage retrade-defence artefact in the entire exit playbook. It pre-empts the buyer's own QoE re-test, locks…
Define QoE scope (3-year lookback, 12 add-back categories, SaaS-specific normalisations)
Scoping the QoE precisely is what makes the resulting normalised EBITDA defensible. The goal is a 3-year lookback in which every adjustment is buyer-accepted and documented, so…
Prep data pack: GL detail, revenue waterfall, AR aging, deferred revenue, CAC build
The QoE firm can only normalise what you hand them, and the buyer's diligence team will rebuild every number from source. A clean, granular data pack is therefore the difference…
Walk-through fieldwork sessions with QoE firm (3 sessions x 4h)
Fieldwork is where the QoE firm pressure-tests your numbers and where you make each adjustment defensible during the buyer-side QoE re-test. The discipline is to document why…
Review draft QoE report; sign off normalised EBITDA
This is the gate where the normalised EBITDA number becomes real. The CFO and CEO review the draft QoE not to rubber-stamp it but to challenge any adjustment that won't survive…
Build a16z-aligned SaaS metrics pack (16 metrics + cohort + magic + R40 + payback), cohort retention analysis (logo + revenue), 12-quarter ARR walk, top-10/Top-50 customer concentration with redaction policy.
Build a16z-aligned SaaS metrics pack (16 metrics + cohort + magic + R40 + payback)
The SaaS metrics pack is the quantitative spine of the equity story. Buyers and bankers triangulate value off a canonical KPI set, so mirroring the a16z 16 startup metrics signals…
Cohort retention analysis (logo + revenue, by year/segment)
Cohort retention is the metric buyers trust least when self-reported and rebuild first in diligence. A blended NRR can hide a deteriorating recent vintage; a SMB cohort churning…
ARR walk: trailing 12-quarter (new + expansion + churn + contraction)
The ARR walk is the single most-scrutinised exhibit in a SaaS sale because it shows the engine, not just the outcome. A buyer wants to see that ending ARR is built from a healthy…
Audit top-25 customer contracts (auto-renewal, MFN, change-of-control), run OSS license audit, review top vendor contracts for change-of-control, compile 3-year litigation disclosure pack.
Audit top-25 customer contracts (auto-renewal, MFN, change-of-control)
Contract terms are where revenue quality is either confirmed or quietly destroyed. The most dangerous clause in a sell-side context is change-of-control (CoC) language that lets a…
Run OSS / open-source-license audit (BlackDuck or FOSSA)
Open-source license exposure is a silent deal-killer in software M&A. A single GPL / AGPL / SSPL package embedded in shipped code can trigger a copyleft license cascade — the…
Review top vendor contracts (cloud, AI inference, data providers) for change-of-control
Vendors can break a deal as surely as customers. If your cloud provider, AI-inference vendor, or critical data supplier holds a change-of-control consent right, the sale can't…
Map top-10 key persons with dependency rating, design stay/retention bonus pool (Mercer 25-95% benchmark), build next-30% succession plan, refresh non-compete/non-solicit/IP-assignment language.
Map key persons (top 10 + functional dependencies) and dependency rating
In a sell-side process, key-person risk is one of the few diligence findings that converts directly into a valuation discount or an escrow/earnout. Buyers underwriting a SaaS…
Design stay/retention bonus pool (25-95% of base, 12-24 month vesting)
Once the dependency map has named who breaks the asset if they walk, the next move is to make those people stay through and beyond close. A well-structured retention (stay) bonus…
Build 'next-30%' succession plan for each key person (named successor / mitigation)
A stay bonus buys time; a succession plan removes the risk. Buyers discount key-person risk most sharply when there's no evidence anyone else can do the job. The "next-30%" plan…
Cross-ref hub for sales-methodology. Re-score top-50 pipeline on MEDDPICC, compile trailing 4-quarter forecast accuracy, tighten discount governance + waterfall, document deal-inspection cadence evidence, author pipeline-coverage defence memo. Cadence section - exempt from 8-task floor per live-build-rules.md.
Re-score top-50 pipeline opportunities on MEDDPICC for buyer credibility
A SaaS seller's forecast is only as believable as the pipeline behind it, and buyers will tear into it during diligence. The defence is a pipeline that's been re-scored against a…
Compile trailing 4-quarter forecast accuracy (target +/-5%)
Forecast accuracy is a proxy for management credibility. A buyer paying a forward multiple on a SaaS asset is, in effect, buying your projections — so the question they ask is…
Tighten discount governance + compute trailing realised-net waterfall
Pricing power is a top-three valuation driver in SaaS, and the cleanest way to prove it is a pricing waterfall that shows how little revenue leaks between list price and what you…
Select the banker who will run the auction. Beauty parade, scorecard-driven, engagement letter signed by week 10. Three sections cover banker long-list and scorecard, beauty parade execution, engagement letter and deal-team formation. Banker selection scorecard is T2D3 IP (5 dimensions: sector volume, senior attention, buyer access, fee structure, cultural fit).
Build 12-15-firm banker long-list across categories (bulge-bracket, elite tech-focused, middle-market specialists, boutique sector firms), build T2D3 banker selection scorecard (5 dimensions x weighted), reference-check 5-7 candidate firms via past sellers.
Build banker long-list (12-15 firms by sector + ARR-band fit)
The bank you hire shapes the outcome more than almost any other single decision in a sell-side process — they set the valuation narrative, control buyer access, and run the…
Build banker selection scorecard (5 dimensions x 5 weights)
A beauty parade without a rubric becomes a charisma contest — and the most polished pitch is rarely the bank that drives the best outcome. The T2D3 banker scorecard forces an…
Reference-check 5-7 candidate firms via past sellers
The single biggest source of post-engagement regret in a sell-side process is the junior hand-off — the senior MD who pitched in the beauty parade vanishes after the engagement…
Distribute beauty-parade brief to 5 finalists (data pack + RFP questions), run 5 beauty-parade meetings (90 min each + Q&A), score finalists and write decision memo for Board with second-best fallback.
Distribute beauty-parade brief to 5 finalists (data pack + RFP questions)
A disciplined beauty parade turns five pitches into a like-for-like comparison instead of five sales theatre sessions. Sending every finalist the same confidential data pack and…
Run 5 beauty-parade meetings (90 min each + Q&A)
The beauty-parade meetings are where you separate the firm that pitched your deal from the firm that will run it. Insist the named MD walks through the valuation analysis…
Score finalists; write decision memo for Board
Selecting the banker is a fiduciary decision, so it must be documented and defensible, not a chemistry call made in the hallway. Scoring every finalist on the same 5-dimension…
Negotiate engagement letter (fee, exclusivity, tail, success-fee thresholds), form internal deal team (CEO + CFO + GC + RevOps + IR/Comms + CPO + Head of People), banker-led 3-day kickoff workshop. Sign-off section - exempt from 8-task floor per live-build-rules.md.
Negotiate engagement letter (fee, exclusivity, tail, success-fee thresholds)
The engagement letter governs the economics of your entire exit and contains clauses that quietly transfer value from seller to banker if left unredlined. The two that bite…
Form internal deal team (CEO + CFO + GC + RevOps + IR / Comms lead)
A sell-side process runs in parallel with the actual business, and the workload — QoE fieldwork, CIM authoring, VDR population, diligence Q&A at a 48-hour SLA — will swamp an…
Banker-led kickoff workshop (3-day intensive)
Once the engagement letter is signed, the banker runs a 3-day internal kickoff that converts an abstract "we want to sell" intention into a sequenced, resourced sell-side process.…
Build the four core marketing artefacts: Teaser, CIM, Operating Model, Management Deck, plus 210-line VDR. T2D3-IP-heavy module - CIM uses Pain-Claim-Gain at company level. Five sections: SaaS metrics pack and KPI appendix, CIM narrative arc (Pain-Claim-Gain anchor), operating model, management presentation deck, data room (VDR) build with tier-1/2/3 staged release matrix.
Format SaaS metrics pack as CIM appendix (printable + screen), overlay company KPIs on Bessemer Cloud / SaaS Capital benchmarks, build pricing-power exhibit (cross-ref pricing-packaging waterfall narrative), build segmented unit economics by SMB/MM/Ent.
Format SaaS metrics pack as CIM appendix (printable + screen)
The raw a16z-aligned KPI pack built in Readiness is analyst-grade; the CIM appendix is buyer-facing. This task converts the working model into an 8-12 page, named-exhibit appendix…
Overlay company KPIs on Bessemer Cloud / SaaS Capital benchmarks
A number in isolation is a fact; a number against a peer median is a valuation argument. This task overlays the company's KPI pack on public reference sets so the CIM can defend…
Build pricing-power exhibit (pricing waterfall + ARPA trend) - inherits pricing-waterfall-narrative
Buyers pay premium multiples for quality of revenue, and the single clearest proof of quality is pricing power — the ability to hold list price through to realised net with…
Unit economics by segment (CAC/LTV/payback by SMB/MM/Ent)
A blended CAC payback number hides the truth a buyer most wants: which segment actually compounds capital efficiently. This task disaggregates unit economics into SMB / Mid-market…
Pain-Claim-Gain anchor section. Author CIM 3-page Pain-Claim-Gain core (T2D3 IP flagship), then Sections 1-5 (Executive Summary + Investment Thesis, Industry/TAM, Product, Customer, Growth Ahead), banker 3-pass redraft and finalisation.
Author CIM Pain-Claim-Gain narrative at company level (3-page core)
This is the anchor task of the whole sell-side playbook — the T2D3 IP that every other CIM section flows through. The Pain-Claim-Gain structure forces the equity story into three…
Author Section 1: Executive Summary + Investment Thesis (5-10 highlights)
The Executive Summary is the most-read and least-forgiven page of the CIM. Many buyers triage hundreds of opportunities a year on this 1-2 page summary alone — if the investment…
Author Section 2: Industry Overview + TAM/SAM/SOM
Section 2 establishes the size and shape of the prize. It converts the abstract "big market" claim from the Pain-Claim-Gain core into a credible, named-source market frame that…
Build 3-statement baseline (P&L, BS, CF) for last 3 years, 3-year bottoms-up forecast (GTM + headcount + opex), base/upside/downside scenarios with sensitivity tornado.
Build 3-statement baseline (P&L, BS, CF) for last 3 years
The historical 3-statement model is the foundation of every sell-side process. Buyers' diligence teams will rebuild your financials from the ground up, so the version you hand…
Build 3-year forecast (bottoms-up GTM, headcount, opex)
A credible bottoms-up forecast is the single most scrutinized exhibit in management projections. Top-down "we'll grow 40% because the market is huge" gets discounted instantly.…
Build base/upside/downside scenarios + sensitivity (multiple, growth, NRR, GM)
Sophisticated buyers don't value a single number — they value a range and stress-test the drivers behind it. Presenting base, upside, and downside scenarios alongside a…
Outline management deck (60-90 min cadence: 6 sections x 10 min), build 40-slide deck (30 main + 10 appendix Q&A backup), final design polish + brand consistency.
Outline management deck (60-min cadence: 6 sections x 10 min)
The management presentation is the first live, unscripted exposure buyers get to the team they're underwriting. The deck is the spine, but the cadence is the strategy: a tight,…
Build management deck (40 slides incl. appendix)
With the outline locked, build the deck to a disciplined 40 slides: 30 main + 10 appendix. The discipline is the point — investment-grade decks follow one slide, one message, one…
Design polish + brand consistency
The final design pass is not cosmetic vanity — in a sell-side process, production quality is read as operational quality. Buyers subconsciously equate a polished, internally…
Select VDR platform (Datasite/Intralinks/Firmex/SecureDocs), build 210-line VDR index (T2D3 IP flagship), populate Tier-1 (post-NDA) and Tier-2 (post-IOI), define PII redaction policy, build staged-release matrix (Tier-1/2/3 per buyer + audit log).
Select VDR platform (Datasite / Intralinks / Firmex / SecureDocs)
The virtual data room (VDR) is the operational spine of the entire diligence phase — it is where every buyer reads your story, and its audit log is the single most important…
Build 210-line VDR index across 10 top-level folders
This is the T2D3 IP flagship of the data-room build: a canonical 210-line VDR index organised into 10 top-level folders, where every line names an exact document a buyer will…
Populate VDR Tier 1 (post-NDA): corp + financial + customer summary
Tier-1 population is the first real test of your data-room discipline: these are the documents every NDA-signed buyer sees alongside the CIM, so they must be polished, internally…
Curate a 40-80-buyer long-list, distribute teaser, secure NDAs, manage anonymity until NDA executed. Three sections: buyer long-list curation (strategics + financial sponsors + tiering), teaser distribution, NDA execution and VDR Tier-1 access grant. Goal: 30+ signed NDAs to feed IOI round.
Build top-25 strategic-buyer long-list (adjacency + scale + M&A track record), top-25 financial-sponsor long-list (PE platforms + growth equity), tier 50-buyer total list (Tier-A priority / Tier-B broaden / Tier-C long-shot competitive tension).
Build strategic-buyer long-list (top-25 strategics by adjacency + scale)
Strategic buyers — operating companies that acquire for synergy — are half your competitive tension and often the source of the top-of-range bid, because they can underwrite…
Build financial-sponsor long-list (top-25 PE platforms + growth equity)
Financial sponsors — PE platforms and growth-equity funds — now drive the majority of SaaS M&A (57-60% of deals, SEG 2026), so a strong top-25 sponsor long-list is non-negotiable…
Tier buyers: Tier-A (priority) / Tier-B (broaden) / Tier-C (long-shot/competitive tension)
Tiering the combined ~50-buyer master list turns a flat contact list into a sequenced outreach strategy. Not every buyer is equally likely to bid at the top of your range, and…
Author 2-page anonymous teaser (no company name; sector + KPI highlights), build distribution tracker (per-buyer status: Sent / NDA-pending / NDA-signed / CIM-sent), execute teaser outreach to 50 buyers in waves with tracking + follow-up.
Author 2-page anonymous teaser (no company name; sector + KPI highlights)
The teaser (or "blind profile") is the first piece of marketing a buyer sees, and its entire job is to generate enough interest to get an NDA signed — without revealing who you…
Build distribution tracker (per-buyer status: Sent / NDA-pending / NDA-signed / CIM-sent)
The distribution tracker is the single source of truth for the outreach phase — without it, a multi-wave, 50-buyer process descends into "who has what?" chaos within days. It is…
Execute teaser outreach to 50 buyers + tracking + follow-up
This is where the buyer list becomes a live competitive process. Executing teaser outreach in disciplined waves controls the narrative: leading with Tier-A builds early momentum…
Finalise mutual NDA template (2-year confidentiality, employee non-solicit, deal-team-restriction), execute NDAs with target 30+ signed, grant VDR Tier-1 access to NDA-signed buyers + CIM distribution.
Finalise NDA template (mutual, 2-year, employee-non-solicit, deal-team-restriction)
In a competitive sell-side process you are about to hand a CIM, KPI pack and redacted customer summary to 30+ counterparties — many of them strategic acquirers who are also…
Execute NDAs with target 30+ signed (tracker)
NDA execution is the conversion gate that determines whether your process has enough competitive tension to clear the IOI floor. The benchmark is a 60% conversion from the…
Grant VDR Tier-1 access to NDA-signed buyers + CIM distribution
Once an NDA is executed, the buyer earns Tier-1 VDR access — the first time they see the company name and the full CIM, the SaaS KPI pack, and the redacted top-50 customer…
Generate >=6 IOIs, advance 3-5 to management meetings, run rehearsed presentations. Four sections: IOI process letter and receipt, management presentation rehearsal (Q&A bank, red-team, exhibit-pull stopwatch, dress rehearsal), management meetings execution, buyer-feedback synthesis and second-round invites (with soft-hold #2-pool retrade-defence script).
Issue IOI process letter (deadline, format, expected fields), build IOI comparison matrix (price + structure + financing + certainty + timeline), decide floor multiple + which 3-5 buyers advance to management meetings.
Issue IOI process letter (deadline, format, expected fields)
The IOI (Indication of Interest) process letter is the instrument that converts a CIM-reading buyer into a structured, comparable first-round bid. Sent roughly three weeks after…
Build IOI comparison matrix (price, structure, financing, certainty, timeline)
Headline price is the most misleading number in a sell-side process. A $220M all-cash bid from a committed strategic is worth more than a $250M bid that is 40% earnout and…
Decide floor multiple + which 3-5 buyers advance to management meetings
This is the process's first hard gate. After IOIs land, the Board sets a floor multiple — the ARR multiple below which a bid does not earn a management meeting — and selects the…
Build 75-question Q&A bank with model answers (T2D3 IP flagship across 21 topic clusters), banker red-team rehearsal (banker plays buyer-of-last-resort), stopwatch exhibit-pull drill (each speaker pulls supporting exhibit <=30s), full internal dress rehearsal.
Build 75-question Q&A bank with model answers (T2D3 IP)
This is a flagship T2D3 IP artefact. Management meetings are won or lost on whether the executive team can answer hard buyer questions consistently, crisply, and with evidence —…
Banker red-team rehearsal (banker plays buyer-of-last-resort)
A management meeting is an adversarial event dressed as a conversation, and the single biggest failure mode is speakers contradicting each other under pressure — the CFO quotes…
Stopwatch exhibit-pull drill (each speaker pulls supporting exhibit <=30s)
Buyers read body language as much as data. A speaker who fields a hard question, names the supporting exhibit, and has the analyst put it on screen within 30 seconds projects a…
Schedule 3-5 management meetings (90 min each + tour), run 3-5 management meetings (60% deck-driven, 40% Q&A; banker present in every meeting), banker debrief after each meeting (capture buyer signals).
Schedule 3-5 management meetings (90 min each + tour)
Scheduling is a competitive-tension lever disguised as logistics. The goal is to run all 3-5 management meetings inside a tight 2-3 week window, because time is the seller's enemy…
Run 3-5 management meetings
This is the live event the entire rehearsal track was built for — the moment 3-5 advancing buyers meet the team and decide whether to write a final-round bid at the top of the…
Banker debrief after each meeting (capture buyer signals)
The 24 hours after each management meeting are the highest-signal window in the entire sell-side process. Buyers are at peak engagement, their internal deal teams are forming a…
Grant VDR Tier-2 access (post-IOI to 3-5 advancing buyers), issue final-bid (LOI) process letter, per-buyer follow-up calls + targeted diligence support, soft-hold follow-up to #2 pool (T2D3 retrade-defence IP). Sign-off section - exempt from 8-task floor per live-build-rules.md.
Grant VDR Tier-2 access (post-IOI to 3-5 advancing buyers)
Tier-2 is the moment a sell-side process changes character. Up to now buyers worked from the CIM and a redacted KPI pack; with Tier-2 they can rebuild your customer, IP, HR, and…
Issue final-bid (LOI) process letter with deadline + bid format
The final-bid (LOI) process letter is the banker's instrument for converting first-round interest into binding, comparable, competitive bids. Its job is to force every advancing…
Per-buyer follow-up calls + targeted diligence support
Between the management meetings and the final-bid deadline, the deal team's job is to keep every advancing buyer fully informed, equally served, and on a controlled cadence. The…
Receive >=3 LOIs at floor, select winner, negotiate milestone-based exclusivity, manage confirmatory diligence with <=48h SLA, defend against retrade. Four sections: LOI evaluation and selection (LOI anchor-to-IOI redline T2D3 IP), milestone-based exclusivity and retrade-defence runbook, confirmatory-diligence Q&A management (cross-ref forecast accuracy + MEDDPICC), NWC peg and RWI placement.
Build LOI comparison matrix (price + structure + exclusivity ask + financing + timing), select preferred LOI in Board memo with second-best fallback, redline LOI to anchor explicit IOI assumptions (T2D3 retrade-defence IP), sign LOI with selected buyer + #2 pool soft-hold message. Sign-off section - exempt from 8-task floor per live-build-rules.md.
Build LOI comparison matrix (price, structure, exclusivity ask, financing, timing)
A headline price is the most misleading number in M&A. Two LOIs at the same nominal valuation can differ by 20-40% in realized, risk-adjusted value once you account for earnout…
Select preferred LOI (Board memo with second-best fallback)
Selecting the preferred LOI is the decision that commits the company to exclusivity — the point at which the competitive auction collapses to a single negotiation. Because…
Redline LOI to anchor explicit assumptions from IOI (block retrade)
This is the flagship retrade-defence move in the T2D3 playbook, executed at the most leverage-sensitive moment in the deal. A retrade — the buyer lowering price after the LOI by…
Sign LOI with selected buyer
Signing the LOI is the formal handoff from competitive auction to bilateral negotiation. It triggers exclusivity, opens confirmatory diligence, and starts the clock on the…
Design milestone-based exclusivity (30 days + extension contingent on diligence-on-time + no-new-findings) (T2D3 IP), codify 6-tactic retrade-defence runbook (T2D3 IP flagship), set up weekly bookings dashboard for buyer (forecast accuracy proof).
Design milestone-based exclusivity (30 days + extension contingent on diligence-on-time + no-new-findings)
Open-ended exclusivity is the structural flaw most sell-side processes never fix — and it is the buyer's single most powerful retrade enabler. A flat 60-90 day no-shop hands the…
Codify retrade-defence runbook (assumptions anchored, soft-hold #2, 48h SLA, penalty clause)
This is the flagship retrade-defence artefact of the T2D3 sell-side playbook — the document that turns a scattered set of good instincts into a repeatable, board-ready system. A…
Set up weekly bookings dashboard for buyer (forecast accuracy proof)
The #1 retrade trigger in B2B SaaS deals is a missed forecast during exclusivity. If a buyer signs an LOI expecting a growth trajectory and then watches bookings soften — or…
Cross-ref hub for forecast accuracy and MEDDPICC. Set up diligence Q&A tracker (<=48h SLA + per-buyer prioritisation), manage commercial diligence (uses MEDDPICC pack), financial diligence (QoE re-test + working capital + AR + waterfall), legal/tax/IP/IT/HR diligence, grant VDR Tier-3 access (sensitive contracts + per-customer pricing) to exclusive buyer.
Set up diligence Q&A tracker (<=48h SLA + per-buyer prioritisation)
Once you sign the LOI and enter exclusivity, confirmatory diligence becomes a velocity game. The single biggest controllable variable in a sell-side process is response latency:…
Manage commercial diligence (pipeline + win/loss + competitive) - uses MEDDPICC pack
Commercial diligence is where the buyer (and their consultant — often Bain, a boutique like DSG, or an in-house value-creation team) stress-tests whether your growth story…
Manage financial diligence (QoE re-test + working capital + AR)
Financial diligence under exclusivity is the moment the buyer's QoE firm re-runs your numbers from the GL up. They will rebuild the ARR walk, re-derive normalised EBITDA, re-cut…
Compute NWC peg using trailing 12-month rolling average, negotiate NWC peg + collar (true-up bands), run RWI feasibility scorecard + broker shortlist (Marsh, Aon, WTW, Lockton), place RWI policy (typically buy-side; seller indemnification cap = 1% EV).
Compute NWC peg using trailing-12-month rolling average
The net working capital (NWC) peg is the target working-capital balance the business is expected to deliver at close. It is one of the most overlooked value levers in a SaaS deal:…
Negotiate NWC peg + collar (true-up bands)
With the trailing-12-month NWC computed (M6.S4), the negotiation turns to two terms that determine how much cash actually reaches the seller: the peg (the target number) and the…
Run RWI feasibility scorecard + broker shortlist (3 brokers)
Representations & Warranties Insurance (RWI) has become near-standard in mid-market-and-up M&A because it lets the seller walk away with more cash at close and minimal residual…
Negotiate and sign SPA, manage regulatory approval (HSR if applicable, foreign regulatory if applicable), execute closing. Three sections: SPA negotiation (business terms, reps and warranties, covenants), regulatory and closing conditions (HSR, foreign filings, customer/vendor CoC consents), closing and Day-1 communications.
Redline SPA business terms (price, structure, escrow, holdback, indemnification cap), redline reps & warranties + disclosure schedules, redline pre-closing covenants + interim operating restrictions, execute SPA signing.
Redline SPA business terms (price, structure, escrow, holdback, indemnification cap)
The Stock (or Asset) Purchase Agreement is where economic value is finally fixed — and where a poorly negotiated deal silently bleeds millions between LOI and signing. The…
Redline reps & warranties + disclosure schedules
Representations and warranties are the seller's contractual statements of fact about the business — corporate good standing, financials, IP ownership, contract validity,…
Redline pre-closing covenants + interim operating restrictions
Between signing and closing the seller still runs the business, but the buyer has now agreed to a price and needs assurance the company they're buying doesn't change shape before…
Execute SPA signing
Signing the Stock Purchase Agreement (SPA) is the moment your sell-side process converts from a negotiation into a binding commitment. For a B2B SaaS exit it matters because…
File HSR (US antitrust) if size-of-transaction threshold met (gated >=$120M 2026), file foreign regulatory (CMA UK, EC, China SAMR, Brazil CADE) if applicable (gated by foreign revenue or foreign buyer), solicit customer change-of-control consents (gated by top-25 contracts containing CoC clauses), solicit vendor change-of-control consents.
File HSR (US antitrust) if size-of-transaction threshold met
A Hart-Scott-Rodino (HSR) filing is a mandatory US antitrust pre-clearance that, when triggered, gates your closing: you cannot close until the statutory waiting period expires.…
File foreign regulatory (CMA UK, EC, China, Brazil) if applicable
Where your SaaS business has material revenue, users, or a local presence outside the US, the deal may trip foreign merger-control thresholds in addition to HSR. This matters…
Solicit customer change-of-control consents (per top-25 contract audit)
Some of your largest customer contracts contain change-of-control (CoC) clauses that require the customer's consent — or grant a termination right — on a sale of the company. Left…
Execute closing checklist (funds flow, certificates, releases), distribute Day-1 communication pack (T2D3 IP - employees, customers, partners, press), sign transition services agreement (TSA) if applicable. Publishing/hand-off section - exempt from 8-task floor per live-build-rules.md.
Execute closing checklist (funds flow, certificates, releases)
The closing checklist is the operational runbook that converts a signed SPA and satisfied conditions into a completed transaction with money in the seller's account. For a SaaS…
Distribute Day-1 communication pack (employees, customers, partners, press)
Day-1 communications determine whether the value you negotiated survives contact with reality. For a B2B SaaS company the asset is its people and its recurring revenue — both of…
Sign transition services agreement (TSA) if applicable
A Transition Services Agreement (TSA) governs the back-office functions one party provides to the other for a defined post-close period — most often the seller (or its former…
T2D3 IP module beyond banker scope. Execute founder QSBS / tax-residency / trust planning before signing. Module starts week 1 in parallel with M1 because trust setup takes 8-12 weeks. Three sections: QSBS planning and trust stacking ($75M shelter via founder + spouse + 3 trusts), state tax residency analysis (CA/NJ/PA/MS/HI non-conforming), founder personal financial plan (post-close portfolio + post-deal role).
Assess QSBS eligibility (asset threshold, holding period, gross-asset history), analyse OBBBA tiered exclusion (50/75/100% at 3/4/5yr; $15M cap; $75M asset threshold), design trust-stacking strategy (T2D3 IP flagship - founder + spouse + 3 trusts = $75M shelter), establish irrevocable non-grantor trusts in non-conforming-state-friendly jurisdictions. Entire M8 module gated by customer.qsbs_eligible == true per live-build-rules.md.
Assess QSBS eligibility (asset threshold, holding period, gross-asset history)
Qualified Small Business Stock (QSBS) under Section 1202 can exclude federal capital-gains tax on a founder's exit — for a SaaS founder this is often the single largest dollar…
Analyse OBBBA tiered exclusion (50/75/100% at 3/4/5yr; $15M cap; $75M asset threshold)
The One Big Beautiful Bill Act (OBBBA) materially expanded QSBS for stock acquired after July 4, 2025, and a SaaS founder must model its impact precisely because it changes both…
Design trust-stacking strategy (founder + spouse + 3 trusts = $75M shelter)
Trust stacking (also called "QSBS stacking" or "1202 stacking") multiplies the per-shareholder QSBS cap by gifting qualifying stock to additional taxpayers — each treated as a…
Establish irrevocable non-grantor trusts (in non-conforming-state-friendly jurisdictions)
This task executes the vehicles that make trust stacking work: irrevocable non-grantor trusts established in trust-friendly, no-income-tax jurisdictions. The structure matters on…
State-by-state QSBS conformity analysis for founder's residency (CA/NJ/PA/MS/HI non-conforming), assess residency change feasibility (timing, audit risk, effective date) for non-conforming-state founders. Sign-off section - 2 tasks - exempt from 8-task floor per live-build-rules.md. Both tasks additionally gated by customer.us_state_qsbs_conforming == false.
State-by-state QSBS conformity analysis for founder's residency
Federal Section 1202 can shelter up to the greater of $15M or 10x basis per shareholder for QSBS acquired after July 4, 2025 (OBBBA) — but that exclusion is only worth its full…
Assess residency change feasibility (timing, audit risk, effective date)
Where the conformity analysis flags a non-conforming high-tax state (California, Pennsylvania, Mississippi, Hawaii), the cleanest fix for the founder's personal Section 1202…
Plan post-close portfolio allocation (rollover equity vs cash; charitable structures DAF/CRT), design founder's post-deal role (CEO retention vs Chair vs EIR vs clean exit; tied to earnout structure). Sign-off section - 2 tasks - exempt from 8-task floor per live-build-rules.md.
Plan post-close portfolio allocation (rollover equity vs cash)
The exit converts a single illiquid, concentrated position into a mix of cash, rollover equity, and possibly buyer stock — and the allocation decision drives the founder's risk…
Design founder's post-deal role (CEO retention vs Chair vs exit)
The founder's go-forward role is both a deal term and a personal decision, and the two are inseparable: buyers — especially PE platforms — price the deal partly on management…
Top-10 / Top-50 customer concentration analysis with redaction policy
Customer concentration is a first-order valuation risk: if one logo leaving could crater ARR, a buyer prices that fragility as a discount or a retrade trigger. The clean-valuation…
Litigation / claim disclosure pack (3-year history)
Undisclosed legal exposure is one of the few things that can survive a clean QoE and still blow up a deal — because at signing it becomes a breach of a representation, not a known…
Refresh key-employee non-compete / non-solicit / IP-assignment language
Buyers in a SaaS deal are acquiring people and IP as much as ARR — and they need contractual assurance that the team can't walk to a competitor and that every line of shipped code…
Document weekly/monthly/quarterly deal inspection cadence as evidence pack
Buyers pay a premium for operational discipline because it de-risks the forecast they're underwriting. A company that inspects its pipeline on a fixed, multi-tier cadence — and…
Author pipeline-coverage defence memo (4x coverage at planned ARR)
In management meetings, the most predictable hard question is some version of "show me the path to plan." A buyer who believes the forecast pays the multiple; one who doesn't,…
Author Section 3: Product Overview (functionality, differentiation, roadmap)
Section 3 is where the Company Claim from the Pain-Claim-Gain core gets substantiated. For a B2B SaaS buyer — especially a strategic running synergy math or a PE platform…
Author Section 4: Customer Overview (cohort retention, NRR by segment)
Section 4 is the proof-of-Gain chapter and the most heavily diligenced part of the CIM. Buyers don't take retention claims on faith — they rebuild cohorts from raw data in…
Author Section 5: Growth Ahead (sales/mkt expansion, monetization, M&A whitespace)
Section 5 is where the multiple is won or lost. Buyers pay for the future, not the past — and this is the section where they tear up the seller's model and rebuild it against…
Banker redraft and final review (3-pass cycle)
A management-authored CIM tells the truth but rarely sells. The banker's 3-pass redraft converts an internally accurate document into a buyer-optimised one — tightening language…
Populate VDR Tier 2 (post-IOI): contracts + IP + HR + tax + IT
Tier-2 population is the detail layer of the data room, released only to buyers who have submitted an IOI at or above your floor. This is the moment a buyer can rebuild your…
Define + execute PII / customer-name redaction policy
A disciplined redaction policy protects you on two fronts simultaneously: it keeps the process confidential (you never want a strategic buyer learning the exact names and prices…
Build staged-release matrix (Tier 1 / 2 / 3) per buyer + audit log
The staged-release matrix is the control surface that turns the data room into a leverage instrument. By gating disclosure to deal progress — Tier 1 on NDA, Tier 2…
Full internal dress rehearsal (90-min full simulation + critique)
The dress rehearsal is the final integration test before live buyers see the team. The red-team and stopwatch drills hardened the components — consistent answers and fast exhibit…
Soft-hold follow-up to #2 pool (warm them in case of retrade later)
This is a flagship retrade-defence play in the T2D3 sell-side playbook. The single greatest source of seller leverage during exclusivity is a credible alternative — a buyer the…
Manage legal/tax/IP/IT/HR diligence
Beyond the financials, the buyer's counsel and specialists run parallel diligence tracks across legal, tax, IP, IT, and HR. Each track can surface a "finding" that becomes a…
Grant VDR Tier-3 access (sensitive contracts + per-customer pricing) to exclusive buyer
The most competitively sensitive data in a SaaS company — per-customer pricing, key-employee compensation detail, and full litigation files — is the crown-jewel category. Released…
Place RWI policy (typically buy-side; seller indemnification cap = 1% EV)
With feasibility confirmed and a broker chosen (M6.S4), you now bind the RWI policy. In modern deals the policy is almost always buy-side: the buyer is the named insured and…
Solicit vendor change-of-control consents (top vendor list)
Mirror of the customer-consent task on the supply side: your critical vendors — cloud infrastructure (AWS, GCP, Azure), AI inference providers (OpenAI, Anthropic), payments, and…
