The clean SaaS deal with one person holding the keys
A private equity firm was acquiring a B2B SaaS company as a platform add-on, at against EBITDA — a 5x multiple. The product was solid. Recurring revenue was clean. 150 customers, 147 of them on Stripe auto-billing. Quality of earnings work confirmed the numbers. By every conventional measure, this was the kind of deal that closes quickly.
Revenue is clean and recurring. Churn is low. The product works. Close at asking.
The business is real. The risk is that everything operationally critical runs through one person. Close, but structure the deal to protect against that.
Four of five assessment lenses came back strong. Revenue conditions were governed by Stripe. Execution was instantaneous and timestamped. Exceptions were rare and stable. Cost commitments were predictable. The fifth lens — transferability — was the problem.
The founder was the only person with production AWS credentials. Stripe webhooks routed to the founder's personal email. None of the operational runbooks existed in written form. If the founder were hit by the proverbial bus the morning after closing, the buyer would be acquiring a product nobody on their team could legally or technically operate.
DVTA returned a PROCEED with conditions signal. The buyer closed the deal — but the structure changed materially.
Final price came down from to .6M, reflecting a 13.9% valuation haircut driven by the transferability gap. .3M of that was placed in escrow, released over 12 months only on completion of a documented founder transition: written runbooks for every critical system, credentials transferred to a named successor, and a trained operational backup.
The deal proceeded. The risk was priced and contractually contained.
A good business with one fragile dependency is still a good business. DVTA's role is not to kill the deal — it is to identify the specific risk, quantify its dollar impact, and convert it into terms that protect the buyer without scuttling the transaction.