Fig. 01 · Scorecard
Exit Readiness
A 12-18 month readiness scorecard for technology companies preparing for buyer diligence, investment banking preparation, or PE exit planning.
Revenue quality
Buyers pay for revenue they can understand, defend, and carry forward.
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ARR/MRR rules
Document definitions, exclusions, expansion treatment, contraction treatment, and reconciliation to financial statements.
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Retention
NRR, GRR, logo churn, cohort retention, renewal calendar, and top-account exposure.
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Sales motion
Pipeline coverage, win rate, sales cycle, CAC payback, channel concentration, and forecast accuracy.
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Contract hygiene
Assignment clauses, pricing terms, cancellation rights, service levels, and customer-specific obligations.
Operating durability
A buyer has to believe the company can run without heroic founder intervention.
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Leadership
Executive bench, role clarity, decision rights, succession risk, and key-person dependencies.
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Finance
Board pack quality, close cadence, working capital, revenue recognition, deferred revenue, and add-back support.
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Delivery
Gross margin by segment, utilization, backlog quality, implementation capacity, and customer success coverage.
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Technology
IP assignment, architecture documentation, security posture, release process, cloud cost control, and technical debt.
Diligence readiness
The data room should prove the story before buyers find the gaps.
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Data room
Index, ownership, refresh cadence, document quality, version control, and support behind each major assertion.
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Valuation narrative
Growth thesis, margin path, moat, customer retention, product roadmap, and value creation plan.
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Issue list
Known buyer objections, remediation status, owner map, and clear explanation of unresolved risks.
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Process timing
The workback schedule from market launch, management presentation, diligence, LOI, and close.
How to run it
Score every category
Rate revenue quality, finance hygiene, leadership durability, delivery capacity, technology risk, and data-room readiness.
Separate blockers from polish
Identify which gaps can kill a process, which affect valuation, and which only improve presentation quality.
Assign remediation owners
Put one owner, one artifact, one due date, and one board-review cadence behind each gap.
Build buyer readiness
Turn major assertions into documents, data exports, retention records, technical artifacts, and diligence-ready explanations.
Re-score monthly
Run the scorecard monthly until the company is ready to withstand buyer diligence without narrative drift.
Questions this raises
How far ahead of a sale should exit readiness start?
Twelve to eighteen months is ideal. That gives enough time to fix reporting, customer concentration, founder dependency, technical debt, IP documentation, and data-room gaps.
Is this a replacement for an investment bank?
No. It prepares the company before and alongside the banker-led process. The banker owns market execution; the scorecard hardens the operating story.
What is the most common readiness gap?
Founder dependency combined with weak finance infrastructure. Buyers can forgive some polish gaps, but they price control risk when the company cannot prove repeatable operating cadence.
Operator resource · Human Renaissance · First published 2026-04-29 · Research methodology
