It still surprises me how often we get to the final stages of a deal — weeks from close — and the numbers fall apart.
Not because they’re deliberately misleading. Just… thin.
Misaligned. Sometimes made to impress, not to operate.
Sometimes no one in the room fully owns them.
You’d think that after months of boardroom conversations and pitch meetings, the financial model would hold up under scrutiny. But in a surprising number of cases, it doesn’t.
The Model Doesn’t Pass the Glance Test
The team’s been selling the future — but no one’s been asked to walk through the mechanics of how it actually works. So when due diligence starts asking questions, it gets quiet.
- Revenue ramps don’t connect to hiring plans
- CAC is optimistic, vague, or inherited from an old deck
- Infra costs are missing or magically light
And the model — the one everyone’s been pointing at for six months — doesn’t pass the “glance test.” It looks impressive, but when you poke at the logic, it crumbles. Sometimes, founders haven’t even opened it in weeks.
No Real Plan to Scale the Team
It’s usually built around now.
The current squad is sharp, committed, and pulling miracles out of the fire every day. But when you ask, “What happens when you double the team?” — there’s a shrug. Or worse, confidence that passion will scale.
Passion’s great. But management doesn’t hire itself.
Functions don’t professionalise on instinct.
And the playbook for 15 people rarely works for 50.
The SaaS Stack Tells the Trut
This one rarely gets airtime in early investor chats, but always shows up late. We find:
- Overlapping tools
- DIY security
- No real onboarding process
- Corporate IT in name only
It’s not laziness — it’s just the cost of moving fast. But when you’re about to scale, mess becomes drag. And drag becomes risk.
The Real Problem: No One Held Up the Mirror
It’s not just that the numbers are off.
It’s that no one’s been holding the mirror up clearly enough, early enough.
Everyone’s excited about the opportunity. The conversations are about vision, story, growth. And by the time the hard questions come, the gaps are baked in.
Good DD Isn’t a Trap. It’s a Spotlight.
That’s why good Tech DD feels like a spotlight.
Not because it catches people out.
But because it shows what’s really there — the parts that will make or break growth after the deal is done.
So if you’re an investor or founder heading into diligence, ask yourself:
Will your numbers still land when someone stops nodding and starts asking?
Want a sharper way to get clear on the numbers — early?
That’s what we do: fast, honest, founder-aware Tech DD. Fix that Financial Model!
