I bought a SaaS business with 2.3% reported monthly churn.
The real number was 9.4%.
That gap cost me $340,000. And I didn't find it until four months after I wired the money.
The Deal That Taught Me Everything
The CIM looked solid. The broker was reputable. The seller's numbers passed a surface-level sniff test. I did the standard diligence — P&L review, customer calls, cohort retention charts the seller provided.
What I didn't do: ask for the raw subscription CSV and compute the numbers myself.
Where the Bodies Were Buried
When I finally extracted the raw billing data, here's what the seller's "2.3% churn" actually hid:
- Logo vs. revenue churn divergence — losing 5% of logos representing 40% of MRR is a completely different business than 5% representing 5%
- Customer concentration — 3 customers represented 60%+ of MRR. If any one churned post-close, my "SaaS" became a services firm overnight
- Annual-plan decay — annual contracts all renewing in the same quarter with a 40% historical downgrade rate the seller "forgot" to mention
- Zombie MRR — 12% of reported revenue came from customers who hadn't logged in for 90+ days. That revenue was already dead; it just hadn't been buried yet
What I Built
ChurnLens — a buyer-side SaaS due-diligence tool that asks what the raw data actually shows, not what the seller reports.
Upload a subscription CSV and get a risk report covering: logo churn vs. revenue churn divergence, customer concentration vulnerability, annual-plan decay projection, zombie MRR detection, and an A-F revenue-quality grade.
The Lesson
The seller hadn't committed fraud. They had made defensible methodology choices that painted a prettier picture. Logo churn on a count basis (2.3%) looked fine. Revenue churn on a dollar basis (9.4%) told a completely different story.
Never trust a summary. Always request the raw CSV.
Free Starter tier: 1 CSV analysis per month. No credit card.
Built by someone who paid $340,000 to learn this lesson so you don't have to.
