What buyers ask first

Why this guide

Your Buyer Map shows who is likely to look at your company. This guide shows what each of them will ask once they do.

Most buyers of healthcare software ask the same questions in roughly the same order. The ones that slow a deal down are rarely about the product. They are about the records behind the numbers: whether the earnings adjustments have support, whether the recurring revenue really recurs, and whether the business runs without its founder.

Each of the 14 areas that follow has three parts:

What they ask

The question as a buyer’s team tends to put it.

Have ready

The records that answer it.

First step

What to do now if those records are not ready.

Each part ends with articles from Capital Row that go deeper. The links open in your browser.

The areas are grouped into four parts: the numbers, the revenue, the company and the technology. Start with whichever part your Buyer Map flagged. The checklist at the end puts all 14 on one page.

This guide is general information, not legal, tax, accounting or valuation advice.

The numbers

What the business earns, and whether the records prove it.

Earnings adjustments

What they ask

What evidence supports each adjustment, and what cost would a new owner still incur?

Have ready

Adjustment schedule, invoices or payroll records, three-year expense history, and replacement-cost assumptions.

First step

Give each proposed adjustment a source, rationale and treatment of continuing costs.

Profit to cash

What they ask

Which differences between reported earnings and cash are timing, and which may affect sustainable earnings?

Have ready

Monthly P&L and balance sheets, bank statements, and a reconciliation for the same periods.

First step

Reconcile the periods and document timing differences before defending an earnings number.

Working capital

What they ask

What operating working capital is needed, and how would the proposed closing terms treat it?

Have ready

Monthly balance sheets, receivable and payable aging, deferred revenue, seasonality and proposed definitions.

First step

Understand the operating pattern before negotiating a working-capital target or closing adjustment.

Price and structure

What they ask

Are both sides pricing the same earnings, assets, liabilities, transition obligations and payment structure?

Have ready

Valuation assumptions, debt and cash treatment, working-capital definitions, and any draft terms.

First step

Write down assumptions behind the headline number and identify where expectations differ.

The revenue

Why the revenue will still be there after the owner leaves.

Revenue durability

What they ask

What is contractually committed, what is behaviorally repeatable, and what must be won again?

Have ready

Contracts, renewal and cancellation terms, customer cohorts, repeat purchases, backlog and pipeline evidence.

First step

Separate contracted, recurring, repeat and one-off revenue; test the history behind each label.

Revenue retention

What they ask

What share of last year’s recurring revenue did you keep from existing customers, and why did the rest leave?

Have ready

Customer-by-month recurring revenue for 24 months, cancellation and downgrade reasons, and the contracts behind the largest accounts.

First step

Calculate retention from customer-level records, then explain the largest losses and what has changed since.

Customer concentration

What they ask

What happens to earnings if the largest customer leaves, reduces spend, or renegotiates after a sale?

Have ready

Customer-level revenue for 24 months, contracts, renewal dates, margins, and relationship ownership.

First step

Review retention history, contract rights and the transition plan for the largest relationships.

Growth evidence

What they ask

What evidence supports the growth in your forecast, and what has the pipeline converted at in the past?

Have ready

Pipeline by stage for 24 months, win rates, sales cycle length, new-customer revenue by month and the assumptions behind the forecast.

First step

Track the pipeline by stage and record conversion, so the forecast rests on history rather than expectation.

The company

Who runs it, who owns what, and what it has promised customers.

Founder dependence

What they ask

Which revenue, approvals, knowledge and customer relationships depend on one person?

Have ready

Responsibility map, customer relationship owners, operating procedures, and a proposed transition plan.

First step

Map the dependencies, then assign owners, documentation and a realistic transition period.

Transferability

What they ask

Which contracts, IP rights, licenses or consents could restrict the proposed transaction?

Have ready

Material contracts, change-of-control provisions, IP ownership records and relevant licenses or permissions.

First step

Have appropriate legal and specialist advisors review transaction-specific rights and required consents.

Compliance and security

What they ask

Which security and compliance commitments have you made to customers, and what documents show you meet them?

Have ready

Security and compliance reports, policies, customer contract terms on data and security, incident history and any open remediation items.

First step

List the commitments in customer contracts, match each to a document, and plan the gaps with a realistic date.

The technology

What a technical buyer will find, including the new questions about AI.

Technology and data

What they ask

What would it take, in time and cost, to bring the product, security and data practices to what a new owner expects?

Have ready

Architecture overview, security policies and any third-party assessments, hosting and data agreements, the roadmap, and who maintains each part of the code.

First step

Document the architecture and security practices, assign ownership of each part of the code, and list known technical debt with an estimate to address it.

AI and data rights

What they ask

Which customer data do your AI features use, under what contract terms, through which vendors, and how would you show what the AI did on a given day?

Have ready

Customer contract terms on data use, a list of AI vendors and their terms, logs of AI actions, human review steps, and any testing for prompt injection or data leaks.

First step

List every AI feature, the data it uses and the vendor behind it; confirm customer contracts allow that use; turn on logging and human review wherever the output is regulated or acted on.

AI replacement risk

What they ask

What would a customer lose by switching to an AI tool, and what happens to your pricing if seats shrink?

Have ready

Usage and integration data, proprietary datasets, switching costs, win and loss notes against newer tools, and your pricing model.

First step

Write down what an AI tool cannot copy (your data, integrations, workflow depth and compliance), show it in usage data, and test pricing that does not depend only on seats.

The one-page checklist

Tick each area when the records are together in one place.

Earnings adjustments. Adjustment schedule, invoices or payroll records, three-year expense history, and replacement-cost assumptions.
Profit to cash. Monthly P&L and balance sheets, bank statements, and a reconciliation for the same periods.
Working capital. Monthly balance sheets, receivable and payable aging, deferred revenue, seasonality and proposed definitions.
Price and structure. Valuation assumptions, debt and cash treatment, working-capital definitions, and any draft terms.
Revenue durability. Contracts, renewal and cancellation terms, customer cohorts, repeat purchases, backlog and pipeline evidence.
Revenue retention. Customer-by-month recurring revenue for 24 months, cancellation and downgrade reasons, and the contracts behind the largest accounts.
Customer concentration. Customer-level revenue for 24 months, contracts, renewal dates, margins, and relationship ownership.
Growth evidence. Pipeline by stage for 24 months, win rates, sales cycle length, new-customer revenue by month and the assumptions behind the forecast.
Founder dependence. Responsibility map, customer relationship owners, operating procedures, and a proposed transition plan.
Transferability. Material contracts, change-of-control provisions, IP ownership records and relevant licenses or permissions.
Compliance and security. Security and compliance reports, policies, customer contract terms on data and security, incident history and any open remediation items.
Technology and data. Architecture overview, security policies and any third-party assessments, hosting and data agreements, the roadmap, and who maintains each part of the code.
AI and data rights. Customer contract terms on data use, a list of AI vendors and their terms, logs of AI actions, human review steps, and any testing for prompt injection or data leaks.
AI replacement risk. Usage and integration data, proprietary datasets, switching costs, win and loss notes against newer tools, and your pricing model.

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