Closing a SaaS M&A deal marks the final phase of the founder’s exit journey. After months of preparation, strategic positioning, and buyer engagement, the focus turns to precision execution. At this stage, founders manage a range of complex details like balancing control, trust, and urgency to bring the transaction to a successful close.
We share practical insights from experienced advisors to help founders navigate the final stretch of a deal with clarity and confidence, from confirmatory diligence to final adjustments and legal close.
This article is part of L40º’s Sell-Side Guide and reflects how we work: combining deep knowledge of SaaS deal mechanics with a clear understanding of founder priorities.
What happens in the closing phase of a SaaS M&A deal
Once a Letter of Intent (LOI) is signed, the real work of closing begins. It's a move from strategy to execution: tracking details, maintaining momentum, and ensuring everything is ready when it’s time to wire funds.
For SaaS businesses, certain areas tend to take a closer look. For example, buyers want to verify the quality of recurring revenue, confirm IP ownership, understand how deferred revenue will be managed, and ensure they are comfortable with data security and compliance.
Here’s how it usually plays out:
- Signing vs. closing
The LOI outlines key terms but isn’t the final step. The deal is only final when the documents are signed and the money is wired.
- What makes SaaS closings unique
Subscription revenue, deferred revenue, and platform security bring extra layers to SaaS deals. Buyers want to be sure the revenue is sustainable, the IP is clean, and the product can scale without risk.
- Typical timeline
Most SaaS closings take 8 to 12 weeks after the Letter of Intent (LOI) is signed, although timing can vary depending on several factors, including how quickly both parties proceed. As a founder, staying organized and responsive helps keep things on track.
Confirmatory diligence: a stress test of the SaaS sale
Confirmatory diligence is when the buyer double-checks everything that has been discussed. The goal of this process is to validate that the business they’re about to buy is as strong as it appeared when they drafted the LOI.
For SaaS, a few areas almost always take center stage. Buyers will want to see clear proof of ARR and retention, review customer contracts, confirm that your code and data are fully owned, and get comfortable with your security and compliance posture. Any gaps or surprises here can slow things down or trigger late-stage negotiation.
Here’s what to expect:
- Recurring revenue and customer contracts
You’ll need to clearly document ARR, churn, renewals, and key customer agreements. Buyers will be looking for consistency and predictability. - IP ownership and data
Clean ownership of code and data is critical. If there are any lingering questions around contractor contributions, open-source use, or data licensing, they need to be resolved upfront. - Security and compliance
Buyers will want to understand how you handle data security, privacy, and compliance requirements. If applicable, buyers may request SOC 2 reports, review privacy policies, and assess third-party risk.
Final adjustments before deal closing
It is not uncommon for the buyer and seller to make final financial adjustments (known as “truing up”) to ensure the purchase price accurately reflects the company’s financial position on the day the deal closes.
By the time the deal closes (which can be 8–12 weeks later), certain financial details may have changed. For example, you might have collected more or less cash, there may be more or less working capital on the books, or you may have paid down debt.
Good advisors will model these adjustments early, so you can anticipate the net result and avoid surprises in the final days of the deal.
Legal execution and signature day
When the deal is ready to close, everything moves quickly. The final documents are signed, wires are set up, and the transaction is formally completed.
Here’s how it typically comes together:
- Documents
The purchase agreement and all related documents, including IP transfers, employment agreements, or board consents, are executed. It’s a coordinated effort, with lawyers on both sides ensuring nothing is missed. - Money flow
Funds are wired according to the final closing or flow of funds statement. If there’s an escrow, which is usually the case for mid-market acquisitions, those arrangements are finalized at the same time. - Timing
This is where preparation pays off. Having a clear close schedule helps avoid last-minute issues with signatures, wire timing, or document delivery.
Staying calm under pressure: advice from SaaS deal advisors
The final weeks before closing can feel intense. There’s a lot happening, and unexpected issues can pop up. The key is to stay focused, keep your team aligned, and trust your advisors to help navigate through.
Here are four practical tips:
1. Structure your deal team
Assign clear owners for legal, finance, HR, and communication tasks to ensure effective management. Don’t try to do everything yourself. Founders should focus on leadership and key decisions.
2. Use a clear checklist
A simple, shared checklist with clear owners and deadlines helps keep things moving and prevents minor issues from causing delays.
3. Keep regular check-ins
Weekly (or more frequent) updates help keep everyone aligned and surface potential blockers early.
4. Know when to lean in and when to step back
Your advisors are there to handle the details. Step in when your leadership is needed, and trust the team to manage complexity.
How SaaS founders can exit with confidence
As the deal nears closing, it’s also time to think about what comes next. A smooth transition helps protect your team, your reputation, and your own experience of the exit.
A few things to consider:
- Post-close role: Clearly define your responsibilities after the deal. Are you staying on for integration? Transitioning out entirely? Clarity here prevents misunderstandings.
- Team communication: Your team will have questions. Communicate openly and honestly, and give them a sense of what’s next.
- Relationships: Finish strong with your investors, your board, and your customers. How you handle this phase shapes your legacy and your future opportunities.
Bringing the deal home
Before the deal is truly done, a few critical steps remain. Escrow terms need to be confirmed, the final mechanics of the close executed, and funds wired. At the same time, internal communication becomes a priority: aligning your team, updating your board, and sharing the right message with customers, all with clarity and confidence.
It’s also the perfect time to lock in your financial strategy. Decisions around tax treatment, liquidity, and wealth planning deserve immediate attention. The choices you make in the first 30 days can have a lasting impact on your financial future.
Finally, it’s worth taking time to define what success looks like. Some milestones are met with closing. Others still lie ahead, in integration, in your next venture, or in the legacy you’re building.
If you're preparing for this stage, having the right advisors by your side can make all the difference. Execution partners, such as L40° advisors, can help you stay focused, anticipate issues, and close on your terms. Contact us.
