Due diligence checklist for sub-$100k deals

Before you sign anything, two questions can be answered from outside the deal. Has anything comparable actually sold, and at what? And is the figure in front of you a sale or an ask? Those are cheap to check and they set the range every later conversation happens inside.

Note the middle figure above, though, because it governs how much weight that check can carry: only a minority of sold deals are published with a profit figure at all. Most of the public record is a price and a category. That is enough to bound a negotiation and nowhere near enough to underwrite one — everything below exists because the seller's private data is the only place the rest of it lives.

Most listings can be disqualified before diligence starts. Run these first, in this order, and stop at the first one that fails without a straight answer.

1. Does the stated profit have twelve months behind it? A business a few months old cannot have a trailing-twelve-month figure. If the number is one good month multiplied by twelve, say so out loud and re-price from there.
2. Does the arithmetic close? Revenue minus the expenses named in the listing should reconcile to the stated profit. Where it doesn't, the missing line is usually the seller's own time, ad spend, or a subscription the buyer inherits.
3. Is the traffic or revenue independently attested anywhere? A platform's verified badge, a read-only analytics share, an app-store dashboard. Screenshots are not evidence; they are graphics.
4. Is the asset the business, or is the seller the business? If the revenue arrives through the seller's personal audience, relationships or account, you may be buying a brand that stops working at handover.
5. Is anything about the deal on a clock? Deadline pressure applied by the seller is a diligence finding in itself.

One rule underneath this whole section: for every figure you are given, ask what independent system would show the same number, and then ask to see that system.

• Read-only access, not exports. Stripe, PayPal, the app store, the ad platform, the store back end. A CSV can be edited; a live dashboard the seller doesn't control the rendering of cannot.
• Money in the bank, not just in the dashboard. Payouts landing in a statement are the strongest confirmation available in a small deal.
• Net of refunds, chargebacks and platform fees. These three routinely separate stated profit from banked profit, and they are the first things a seller's spreadsheet drops.
• Month by month for twenty-four months where it exists. An annual total hides seasonality, the launch spike, and the month a channel died. Twelve months is the minimum; twenty-four is where trends become legible.
• The full expense list, including what the seller does for free. Their own labour, a family member's, contractors paid off-platform. Price the replacement, not the omission.
• Concentration, on every axis. One customer, one product, one supplier, one channel or one keyword carrying most of the revenue is a discount, and it is the discount sellers argue with most.
• What happens to the numbers without the ad spend? If growth stops when spend stops, you are buying a media buy, not an asset.

• Analytics access, read-only, for the full history. Compare it against the revenue months; the two curves should tell the same story.
• Where the traffic comes from, and whether it would still arrive next quarter. Search, paid, social, marketplace and referral traffic carry very different risks of stopping at handover.
• Search dependence, specifically. If one search engine sends most of the visitors, the business's revenue is downstream of somebody else's algorithm, and history says those change.
• For subscription products: retention, cohort by cohort. The same MRR at 2% and 15% monthly churn are different assets at different prices.
• Are the users real and are they engaged? Registered accounts, active accounts and paying accounts are three different numbers, and sellers quote whichever is largest.
• Anything that looks bought. Traffic spikes with no matching revenue, backlinks from unrelated sites, review patterns that arrive in clusters.

This is the section that sinks small deals after they close, because the answers only look obvious. Make the seller list the assets, then verify each one separately.

• The domain, and who is registrar-of-record. Confirm it is unlocked, transferable, and not held inside somebody else's reseller account.
• The code, and who owns it. Contractor or agency work without a written assignment of rights is an unresolved claim on the asset. Ask for the assignment, not for reassurance.
• Third-party accounts and their terms. Some platforms permit account transfer, some require a fresh account, some forbid it. This is a question with a documented answer for each provider — get it before the price is agreed, not after.
• Upstream dependencies and their pricing. APIs and models the product is built on come with the seller's rate card and terms, which may not survive a change of ownership.
• Ad accounts, pixels and their learned audiences. Frequently the real asset, and frequently the part that cannot be handed over.
• The customer or subscriber list — and the consent attached to it. Whether you may lawfully keep emailing a list you acquired depends on how it was collected and where those people live; take that one to a lawyer in your jurisdiction rather than to the seller.
• Trademarks, brand names and the app-store listings that carry them. Including whether anyone else has filed for the same mark.
• Every credential, in an inventory. If it isn't on the list at signing, assume you won't have it afterwards.

• Use escrow, at any size. The fee is trivial against the loss it prevents, and refusing escrow is itself an answer.
• Stage the handover. Assets in, funds released — not the other way round, and not on a promise.
• Put the transition in writing. How many hours of the seller's support, for how long, covering what, and what happens if it doesn't arrive.
• Get the representations you are relying on into the agreement. If the revenue figure is why you are paying this price, it belongs in the contract as a warranty, not in the listing as a claim.
• Agree what happens to post-close revenue and refunds. Subscriptions billed before the handover, refunds requested after it — decide now, cheaply, rather than later, expensively.