Exit Readiness: 12 Things Buyers Will Ask For
Whether you're planning to sell in 2 years or 10, here's what sophisticated buyers expect — clean bookkeeping, board-ready reporting, financial statements, and M&A preparation checklist.
Whether you're planning to sell in 2 years or 10, sophisticated buyers have a standard set of expectations. The businesses that command premium valuations aren't just profitable—they're organized, transparent, and well-documented. Here's what buyers will ask for.
Financial Documentation
1. Three years of audited or reviewed financial statements — GAAP-compliant, with clean audit opinions.
2. Monthly financial packages — showing you have a consistent close process and timely reporting.
3. Revenue detail by customer, product/service, and geography — buyers want to understand concentration risk.
4. Normalized EBITDA analysis — add-backs for owner compensation, one-time expenses, and discretionary spending.
Operational Documentation
5. Customer contracts and retention data — recurring revenue with long-term contracts commands premium multiples.
6. Employee roster with compensation details — key-person risk analysis and team stability.
7. Vendor and supplier agreements — material contracts, terms, and concentration.
8. Technology and IP inventory — proprietary systems, patents, and competitive moats.
Legal and Compliance
9. Entity structure and organizational documents — clean cap table, operating agreements, and governance documents.
10. Tax returns for all entities — three years minimum, with correspondence from tax authorities.
11. Insurance policies and claims history — D&O, E&O, general liability, and cyber coverage.
12. Pending or threatened litigation — full disclosure with legal counsel assessment.
Key Takeaways
- Start exit preparation 2-3 years before your target timeline
- Clean, GAAP-compliant financials are non-negotiable for premium valuations
- Revenue concentration above 20% in a single customer is a risk flag
- Document all key processes to reduce buyer's perceived risk
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Talk with Aligned Ledger about where you are today and what the right next move looks like for your finance function.
Aligned Ledger is not a CPA firm and does not provide tax, attest, or assurance services.
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