The Hidden Costs Buyers Overlook in SaaS Acquisitions

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Most SaaS buyers focus on the headline numbers:

💵 MRR

📈 Growth rate

💰 Seller’s discretionary earnings

But the real risks are often buried below the surface. Miss them, and your deal ROI gets crushed.

Here are the 5 hidden costs I see buyers overlook again and again:

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1. Deferred Revenue Liability

SaaS loves annual prepaids. Sellers pocket the cash upfront, but you, the buyer, still owe the service.

• Example: $300K in prepaid contracts collected in December. You buy in January. Guess who’s delivering 12 months of service with no cash coming in?

• Fix: Adjust for deferred revenue in your LOI.

2. Churn Lag

Churn doesn’t show up instantly. Customers often stop using the product months before they cancel.

• Example: A product shows “3% churn,” but usage data reveals a wave of silent churn coming in the next quarter.

• Fix: Always request usage metrics, not just billing data.

3. Support Backlog

That “lean” support team the founder brags about? Often it’s just them, answering tickets at midnight.

• Once you step in, you’ll need:

  • More staff

  • Better tooling

  • Training and knowledge transfer

• Fix: Bake in the cost of scaling support properly.

4. Technical Debt

Codebases often look “fine” at a glance, but hide years of shortcuts.

• Outdated frameworks

• Missing test coverage

• Single dev dependency

• No CI/CD pipeline

• Fix: Always do a technical diligence review. Budget for cleanup.

5. Customer Concentration Risk

One whale account paying $20K MRR might look great, until they churn.

• Sellers often spin it as “proof of enterprise demand.”

• In reality, it’s a risk multiplier.

• Fix: Model your downside if the top 1–2 customers walk.

The Takeaway

Great SaaS businesses don’t come cheap. But “cheap” SaaS deals often come with these hidden costs attached.

Do your diligence. Adjust your structure. Protect your downside.

That’s how you turn a deal that looks good into one that actually is good.