How to sell your startup: prepare the numbers buyers ask for

To sell your startup well, prepare the numbers before you list it. Buyers will ask for monthly financials, revenue that ties to payment records, customer retention, a list of top customers, proof you own the code and brand, and a clear picture of how much work you do each week. Sellers who have these ready sell faster and keep more of the price.

This is general education, not legal, tax or financial advice. Talk to an accountant and a lawyer before you sell.

Why preparation changes the price

Buyers test what they are told. FE International's sell-side due diligence checklist says buyers typically try to tie revenue to bank statements, check add-backs against source documents, rebuild ARR from contracts and confirm IP ownership. It adds that unsupported items are usually removed from the valuation and undisclosed issues are priced into escrows or indemnities.

In plain terms, every number you cannot prove is a number the buyer will discount. Every surprise they find later gives them a reason to lower their offer.

Step 1. Know what your business is worth

Get a realistic price range before you list. Small software businesses are often priced on seller's discretionary earnings, which is profit plus the owner's pay and perks. FE International's 2026 valuation guide reports about 2.5x to 4x SDE for private SaaS under $1M in annual recurring revenue, with larger companies moving to revenue-based pricing. Our guide to startup valuation multiples explains how to use these ranges.

Check how your product looks from the outside. The traffic checker shows the modelled visits, tech stack and SEO audit that a buyer might run on your domain, so you can fix visible issues before they find them.

Step 2. Clean up the financials

Monthly statements

Prepare monthly profit and loss statements for at least 24 months, and ideally 36. Close the books each month. Separate recurring revenue from one-time revenue, and show refunds and chargebacks clearly.

Revenue that ties out

Make sure three things agree with each other: the payment provider, your bank account and your accounting records. A buyer will check. If there are differences, write a short note explaining each one, such as timing of payouts or a refund wave.

Add-backs with proof

Add-backs are expenses you remove to show true earnings, such as your own salary or a one-off legal fee. Every add-back needs a document, such as an invoice or payroll record. Unsupported add-backs are the fastest way to lose a buyer's trust.

Costs in detail

List recurring costs: hosting, AI and API usage, software, contractors and support. For AI products, show the compute cost per customer or per unit of revenue. Buyers worry about margins that depend on a single provider's pricing.

Taxes

Know your position on sales tax, VAT on digital services and contractor classification. Clear any open notices if you can.

Step 3. Prepare customer and retention data

Buyers pay for revenue they believe will continue. Show them why it will.

• Cohort retention. A table showing how many customers and how many dollars remain after 3, 6 and 12 months.
• Net revenue retention and churn. FE International's checklist notes that buyers often test for net revenue retention above 100 percent, annual churn below 10 percent and gross margin above 75 percent. If you fall short, document the reasons and what you changed.
• Top 20 customers. Revenue, plan, contract term and renewal date.
• Concentration. If one customer is more than 10 percent of revenue, expect the buyer to test it. Prepare the customer in advance if you can.
• Acquisition channels. Where new customers come from, and how stable those channels are.
• Pricing history. Discounts and promotions, and why you ran them.

Step 4. Gather legal and IP documents

Disorganized legal records are a common reason deals stall.

• Signed IP assignments from every founder, employee and contractor who wrote code or made content, including offshore freelancers.
• Proof that the company or you own the domain, trademarks and social accounts.
• Customer contracts and any unusual terms, such as exclusivity or change-of-control clauses.
• Vendor, hosting and API agreements, and whether they can transfer to a buyer.
• Privacy policy, data processing agreements and a list of sub-processors that matches how your product handles data.
• A cap table, if there are co-founders or investors.

If you used AI coding assistants, review the code for licensed snippets. FE International's checklist lists this as an item to check.

Step 5. Document the product and operations

A buyer wants to know they can run the business without you.

• Architecture and deployment. A short document on how the app is built, hosted and updated.
• Access list. Every account the business runs on: domain registrar, DNS, cloud, email, payment provider, support tools, app stores.
• Weekly workload. Hours per week you spend on support, development, marketing and admin.
• Playbooks. Written steps for recurring tasks, such as refunds and onboarding.
• Security basics. Backups, access controls and any incident history.

The less the business depends on you personally, the higher the multiple. FE International lists owner independence as a factor that raises valuation.

Step 6. Write the story

Numbers need a narrative. Prepare a one-page summary covering:

1. What the product does and who uses it.
2. How the business makes money.
3. Why it is growing, steady or declining, with evidence.
4. Where the growth opportunities are that you have not tapped.
5. Why you are selling.

Be honest about weaknesses. A buyer who discovers a problem you hid will either walk away or demand a discount. A problem you disclosed early becomes a negotiable detail.

Step 7. Choose where and how to sell

You have three main routes.

• Open or startup marketplaces. Acquire.com says sellers receive offers from buyers with verified funds and can close through Escrow.com. Flippa offers auctions and fixed-price listings, a data room and optional broker help.
• Curated marketplaces or advisors. These screen buyers and handle more of the process, usually at a higher cost.
• Direct sale. You can approach buyers yourself, which is cheaper but riskier.

We compare the main options in where to find startups for sale. If your revenue is verified from the payment provider, the Buy a startup marketplace is another place to list or study comparable deals.

Step 8. Set up a data room

A data room is a shared folder with all your documents, organized in sections: financials, customers, legal, technical, operations. Use clear file names and include an index. Control access, and share sensitive files only after an NDA and proof of funds.

Step 9. Prepare for buyer calls and questions

Expect questions on:

• Why churn rose in a certain month.
• What happens if a provider changes pricing or terms.
• How long a new owner needs to learn the business.
• What you would do with another year of ownership.

Write short, honest answers in advance. If you do not know something, say so and promise to find out.

Step 10. Plan the deal terms and handover

Decide what you will accept before you receive offers.

• Payment structure. Cash at closing is cleanest. Some buyers propose seller financing or an earn-out. See financing a startup acquisition.
• Transition period. Be clear on how many hours you will provide and for how long.
• Non-compete. Know the scope you can live with.
• Warranties. You will state that your numbers are accurate, so make sure they are.

Common seller mistakes

• Listing before the books are clean.
• Hiding churn or a customer who is about to leave.
• Taking the first offer without comparing structures.
• Negotiating privately and skipping escrow.
• Neglecting the product during the sale, so metrics fall while buyers are looking.

FAQ

How long does it take to sell a startup?

Small deals can close in a few weeks, but preparation can take longer. Clean records, quick answers and a motivated buyer shorten the process.

What documents do buyers ask for most often?

Monthly financials, payment provider and bank records, customer and retention data, contracts, IP assignments and a list of accounts and tools. Having them organized saves time and builds trust.

Should I hire a broker?

It depends on deal size and your time. Brokers handle valuation, buyer search and negotiation, but charge fees. For small deals, many founders use a marketplace and a lawyer.

Do I need a quality of earnings report?

For larger deals, a sell-side report from an independent accountant can speed up buyer diligence. For very small deals it may cost more than it adds.