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Playbook20 min readFocus · June

Pre-Sale Diligence Readiness

The 200-item list buyers will ask for — get ahead of it.

Focus for June

Customer reference readiness

June: the references that matter are built years in advance.

Refreshes on the 1st of every month

Identify the 10 reference customers a buyer will eventually ask to call. Strengthen the relationships now — exec lunches, joint roadmap sessions, NPS attention. The list shouldn't be reactive.

  • Top 10 reference candidates identified
  • Quarterly exec touch on each
  • Renewal status for each tracked
  • Permission-to-reference noted in CRM
01

The data room, organized

Organize the data room so a buyer's analyst can self-serve. The structure below is the one most QofE teams expect.

FolderContentsLiving document?
01 — CorporateFormation docs, cap table, board minutes, equity grantsNo (snapshot)
02 — FinancialAudited/reviewed FS, monthly P&L, BS, CF (36 months)Yes — refresh monthly
03 — TaxFederal/state returns (3 years), nexus analysisNo
04 — CustomerTop 20 customer revenue (36 months), churn, contractsYes
05 — VendorTop vendor list, key contracts, change-of-control clausesYes
06 — HROrg chart, comp, handbook, benefits, key employee agreementsYes
07 — LegalLitigation, IP assignments, NDAs, MSAsYes
08 — OperationsFacilities, leases, equipment, insuranceYes
09 — IT/SecuritySystems list, security policies, incident historyYes
10 — CompliancePermits, certifications, regulatory filingsYes
02

The questions that kill deals

  • Customer concentration — single customer > 20% of revenue without contractual protection
  • Key-person dependence — owner or 1-2 people drive top revenue or technical capability
  • Undocumented IP — code, formulas, or processes never assigned in writing
  • Change-of-control clauses — contracts that terminate or re-price on sale
  • Misclassified workers — long-term 1099s that should be W-2
  • Related-party arrangements — leases, vendor relationships, family on payroll without market terms
  • Sales tax nexus exposure — selling into states without registering
03

12-18 months out checklist

  • Move to accrual accounting if still on cash basis
  • Engage a sell-side QofE (yes, on yourself — find issues early)
  • Get a confidential 409A or business valuation
  • Review and renew customer MSAs with assignability
  • Audit vendor contracts for change-of-control
  • Get IP assignments from all current and prior contractors
  • Stand up a virtual data room (Datasite, Intralinks, or even a structured Drive)
  • Bring in a CFO or fractional CFO with transaction experience
  • Begin estate and tax planning (see resource: Owner Transition Planning)
More for Enterprise / Pre-Exit

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Guide

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Template

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How your books should look 18 months before a transaction.

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Workshop

Owner Transition Planning

Personal, financial, and identity work for what comes next.

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