If you’re thinking about selling your SaaS business, you might feel you’re stepping onto unfamiliar terrain. After all, while you’re probably selling your first or perhaps second business, the buyer on the other side is likely a seasoned professional, having done this dozens of times. At Continuum, we believe that treating sellers fairly, transparently, and in a way that ensures every seller can serve as a positive reference, creates a strong reputation benefiting both sellers and ourselves.
To help level the playing field, here’s our take on the top ten pitfalls we’ve seen sellers encounter:
- Not Clearly Defining Your Priorities
Nobody’s forcing you to sell. Make sure you’re crystal clear about why you’re selling, whether it’s retirement, succession planning, employee protection, or financial reasons that is important to you. Clearly defined motivations guide you to the right buyer and the right deal structure, helping to ensure your expectations align precisely with the outcome.
- Unrealistic Valuation Expectations
Anchoring your valuation to a high-flying public company or inflated broker estimates is common—and dangerous. Unrealistically high valuations are often non-starters, causing unnecessary frustration and failed negotiations. Get real, stay realistic, and focus on achieving a fair valuation that reflects the true state and potential of your business.
- Lack of Transparency on Big Issues
Every business has flaws. Share them upfront. Issues disclosed early can be easily managed. Wait too long, and trust is damaged, price renegotiations occur, or worse, deals collapse entirely. Honesty early in the process builds trust and facilitates smooth deal progression.
- Buyers Who Can’t Fund the Deal
Beware of buyers, particularly certain search funds, who might not have committed capital and intend to “shop” your deal post-LOI. Always verify your buyer’s financial readiness. Don’t let deal fatigue set in; choose a partner who demonstrates financial clarity and readiness upfront.
- Not Talking to Previous Sellers
Selling your company is likely the largest financial transaction of your life. Failing to speak to past sellers who’ve dealt with your prospective buyer can be reckless. Get references and ensure the buyer’s reputation aligns with your expectations, particularly regarding fairness in negotiations, honoring the terms in the LOI, and meeting payment obligations like holdbacks and earn-outs.
- Forgetting to Consult Sellers Who Stayed
Also talk to founders who’ve stayed post-sale. How does running their business now compare to before? Check for buyer support, decision-making freedom, cultural fit, and fairness in earn-out calculations. These insights can inform your expectations of post-close realities and your future working environment.
- Mismanaging the Due Diligence Phase
It’s crucial to explicitly agree on due diligence terms in your LOI to prevent misunderstandings. Typically, the LOI requires exclusivity, meaning negotiations with other buyers are paused unless the deal falls through. Breaching exclusivity usually terminates the deal immediately. Avoid major business changes without informing the buyer; decisions remain yours, but clear communication preserves trust and smooths the process.
- Ignoring the Post-Integration Plan
Always clarify post-close intentions. Will your employees remain? Are drastic cuts planned? Sudden, unexpected changes can hurt morale and legacy. Ensure transparency upfront. Demand detailed insight into what changes the buyer foresees over the next month, year, and five years, ensuring you’re comfortable with their vision. Sometimes, radical changes may be necessary and even beneficial; we’re simply emphasizing that it’s essential these plans are clearly communicated to you beforehand.
- Overlooking Working Capital Details
Purchase price isn’t everything. Get clear on how each party will handle working capital such as cash in bank, receivables, and liabilities. Define precisely what’s left behind, so you don’t leave money on the table or unintentionally burden the business’ cash flows post-sale. Addressing working capital clearly and early ensures no unpleasant surprises.
- Poor Confidentiality Management
Keep your deal circle tight. Uncontrolled messaging before the deal closes can create confusion, client anxiety, and sometimes chaos. Inform your team and customers strategically and calmly, ideally only moments before the deal closes or immediately post-close, to protect your business reputation. Manage confidentiality carefully and communicate proactively to mitigate disruption and maintain business continuity.
Selling your company doesn’t have to be daunting. Stay clear-eyed, and proactive. Choose a buyer who values fairness, transparency, and trust—values we stand behind every day at Continuum. Ultimately, the success of your transaction should rely not only on the highest bidder but also on finding a partner who shares your vision and respects the legacy you’ve built.