Thinking About an Exit? 7 Buyer Benchmarks That Matter

If you're contemplating an exit, you're probably asking yourself: "What makes my company attractive to buyers?" The answer isn't just about having great technology or a compelling vision. Here are seven benchmarks that matter.

First, Revenue Growth. This is the easy one—growth is the goal for any tech company, and the higher the growth, the easier it is to capture buyer attention. If your company is growing at a good pace, you want to go to market while you still have good visibility into that growth, rather than waiting to realize as much as you can, then talking to buyers too late as your growth curve flattens out.

Second, Profitability and Margins. Buyers will look at your gross margins and EBITDA to understand the economics of your business model. For software companies, they expect to see gross margins in the 70-85% range. If yours are lower, they'll want to understand why—is it services revenue, hosting costs, or something structural?

Third, Customer Retention. Buyers today tend to focus more on revenue retention, both gross retention and net. Gross retention shows how well you keep existing revenue, calculating only lost revenue over the course of a year. Net retention, which includes expansion, shows whether customers are growing with you. Getting a good handle on your revenue retention is vital, and high revenue retention can offset even low growth, because it tells a buyer that you are providing meaningful, sticky value to your customers. 

Fourth, Customer Concentration. Buyers will evaluate how dependent you are on any single customer. If your top customer represents 20-30% of revenue, that's a concentration risk that will affect how they value your business and structure the deal. To offset the dependence, they will look at international expansion, and growth in new or related markets. 

Fifth, Revenue Predictability. Buyers look at what percentage of your revenue is truly recurring—meaning contracted and automatic—versus "reoccurring," where customers come back but aren't contractually committed. Annual contracts, multi-year deals, and consumption models with strong usage patterns all contribute to predictability. If you can show that 70-80% of next quarter's revenue is already visible, buyers see less risk, thus more value.

Sixth, Scalability. Buyers are evaluating whether your business model can grow without proportionally increasing costs. They'll look at your customer acquisition costs, sales cycle length, implementation requirements, and support needs. A scalable business can double revenue without doubling headcount. If your model requires significant services, custom development, or hands-on support for each customer, buyers will factor that into their valuation.

Seventh, Competitive Advantage, Strategic Opportunity. Do you have proprietary technology, strong brand recognition, or a leadership position in a niche market? Beyond your standalone strengths, what opportunity do you represent for a buyer? Maybe you accelerate their product roadmap, give them access to a new customer segment, or strengthen their competitive position. Different buyers will see different strategic opportunities in your business.

These benchmarks aren't about having perfect metrics—they're about understanding how buyers will interpret your metrics so you can go to market with clarity. The goal is to approach M&A with realistic expectations, target the right buyers, and tell your story effectively. Whether your metrics are exceptional or you have some challenges to address, knowing how buyers will evaluate your business puts you in control of the process.

This is where Corum’s buyer database and deal experience will give you the edge to get the optimum outcome you deserve.