By the time a buyer's diligence team starts asking questions, it's too late to fix what they find. The preparation that protects your price happens months before the first offer.
By the time a buyer's diligence team starts asking questions, it's too late to fix what they find. The work that determines how smoothly a sale goes — and how much of the purchase price you actually keep — happens months before the first offer. For technology founders especially, preparing for due diligence is the single highest-leverage thing you can do before a sale.
What Buyers Actually Look For
Due diligence is the buyer's investigation into whether your company is what you say it is. In a technology deal, the scrutiny concentrates on a few areas: whether you truly own your intellectual property and code, whether your contracts are assignable, whether your finances hold up, and whether your employment and data practices create hidden liabilities. Gaps in any of these can lower your price, delay the deal, or kill it outright.
Get Your IP Ownership in Order
This is where tech deals most often stumble. Buyers want a clean chain of title to your core technology. That means every founder, employee, and contractor who touched the code signed a valid assignment transferring their work to the company. Founders frequently discover — during diligence, at the worst possible moment — that early contractors never assigned their contributions, or that code written before incorporation was never formally transferred in. Fix these gaps before you go to market, not after a buyer finds them.
Preparing your company for a sale? We help technology founders get diligence-ready across Arizona, California, and Texas.
Book a Free Consultation →Organize Your Contracts and Confirm Assignability
A buyer is paying for your revenue, which lives in your customer contracts. If those contracts can't be transferred without each customer's consent — or worse, terminate automatically on a change of control — the value you're selling may walk out the door at closing. Inventory your material contracts early, flag the assignment and change-of-control clauses, and know where you stand before a buyer asks.
Clean Up the Corporate Record
Disorganized corporate records signal risk. Buyers want to see a complete, accurate cap table; properly documented equity grants and option issuances; board and stockholder consents for major decisions; and clean formation and good-standing records in every state where you operate. Reconstructing years of missing paperwork under deal pressure is painful and expensive. A pre-sale legal audit surfaces these gaps while there's still time to fix them calmly.
Address Employment and Data Issues
Worker misclassification, missing confidentiality and invention-assignment agreements, and data collected in ways that don't match your privacy policy are all common diligence findings — and all carry real liability. In a multi-state company, the analysis differs by jurisdiction, since employment and privacy rules vary sharply between states like California, Arizona, and Texas.
Start Early
The companies that sell cleanly are the ones that prepared months ahead. A pre-sale audit — ideally six to twelve months before going to market — lets you fix problems on your own timeline rather than under a buyer's microscope. It often pays for itself many times over in a smoother process and a stronger negotiating position. Our technology M&A practice helps founders prepare for and navigate a sale.
Frequently Asked Questions
Ideally six to twelve months before going to market. That window lets you fix IP, contract, and corporate-record gaps on your own timeline rather than under deal pressure, which protects both your price and your leverage.
Broken IP chain of title — contractors or early contributors who never signed valid assignment agreements, or code created before the company was formed that was never transferred in. It's also one of the most fixable problems if addressed before going to market.
Yes. If diligence surfaces unexpected risks — unassigned IP, non-transferable contracts, employment liabilities — buyers routinely use those findings to renegotiate price, demand escrows and indemnities, or restructure the deal. Clean preparation removes that leverage.