If Part One, “Software Compliance & Ownership Essentials,” was about building software the right way, this article is about proving it when it counts. Enterprise clients, investors, and acquirers aren’t just buying a product; they’re buying confidence: confidence in your ownership, your governance, your risk profile, and your ability to scale without exposing them to liability. And that confidence doesn’t come from what you say—it comes from what you can show.
Whether you’re selling a standalone software product, spinning out a tool developed inside your agency, or trying to close a major licensing deal, being audit-ready is no longer optional.
What It Means to Be “Enterprise or Exit Ready”
To pass buyer scrutiny, your software must be:
- Ownable: Clear IP assignment and no licensing entanglements
- Defensible: Audit trails, contracts, and access logs
- Transferable: Digital assets and credentials easily handed off
- Compliant: With data privacy laws, licensing rules, and your own contracts
- Supported: With documentation, security policies, and SLAs
The following are ten essentials for getting ready for the gauntlet of software due diligence. Some of these we discussed in more detail in the first article; however, we will briefly reference them here where relevant. You should keep all of these items and their related documents in a central repository, or, as Kris Jones refers to it, a Data Room, in his brilliant manual for acquisitions, The Entrepreneur’s Exit Playbook.
1. Employment and Contributor Agreements
Most founders assume that if someone worked for them, the IP is automatically theirs. But unless it’s in writing—with the right clauses—ownership can be contested. Diligence teams know this, and it’s one of the first places they look. We have more details in “Software Compliance and Ownership Essentials.“
Have signed employment and contractor agreements that:
- Include IP assignment
- Define “work for hire”
- Waive future claims to the code or designs
Organize all documents by contributor and their respective roles.
2. Software Bill of Materials (SBOM)
Buyers want to know what’s inside your software, down to the libraries and packages. An SBOM is no longer optional. It’s the modern equivalent of a product ingredients label, articles of incorporation, and without it, you’re flagged as a compliance risk.
- Use FOSSA, Snyk, or GitHub tools to generate a live SBOM.
- Tag license types, versions, and update it with each release.
- Document known vulnerabilities and their resolution.
3. Security and Code Audits
No enterprise procurement team will skip this step. They need to know you’re not sitting on a ticking time bomb. Even if your code works, if it’s insecure or undocumented, you’re a liability. This is true even with an off-premise SaaS solution; they will want to see a variety of security validations.
- Commission a third-party pen test or code quality audit.
- Maintain summaries, remediation logs, and retest results.
- Include evidence of secure coding practices and access controls.
I conducted my first third-party code audit with DataPrizm because we were changing development vendors and I wanted to ensure they had delivered all the elements they promised, as well as identify any potential surprises. This not only compelled them to organize and document everything, which they should have done all along, but also helped identify multiple security and code-level issues.
4. Client-Funded Features Tracker
As noted in part 1, in many of my applications, we have had clients request and/or fund functionality. Especially if you come from the search agency world, it’s common to build custom features for a client or unique tools for a nuance of their tech stack that eventually get rolled into your core product. But unless you’ve clearly documented the scope, ownership, and reuse rights, you may face legal and ethical conflicts down the road. Without clear reuse rights, that functionality could become a legal landmine during the acquisition process.
The acquirer will want to discuss the potential for continued licensing with multiple customers, and this is where they may mention or make demands related to the features you have created.
Key elements to track:
- Feature name and purpose
- Funding client and scope
- Contract references
- IP and reuse rights status
This helps you prove what’s yours, even if someone else paid for it.
5. Digital Asset Inventory
Deals have been delayed or derailed over forgotten credentials. If your domain is still registered to a developer’s Gmail account, or your Firebase console is under someone’s personal login, it’s a red flag.
When I prepared Hreflang Builder for sale, I had ten tables in Airtable of all of the key information related to the application.
- Website details – all licensed plugins, including subscription dates, login details, and SSL licenses
- Image licenses – for the website, blog, and application
- Email and DNS details – everything to transfer Google Workspace and report email server and applications
- Software Bill of Materials – all of the internal applications, agreements, and integrated codes, API access
- Domain Registrations – we have multiple domains we needed to transfer – some were in my name and others in the company so that had to be organized.
- GitHub Access – ensured access to code repository and all documentation and build pipelines.
- Server Access – all the information and contacts to transfer AWS
Even with the stress and frustration of gathering this information for previous application sales, there were elements I missed or was too busy to address, so I had to look for or request logins.
Tips:
- Ensure that everything from day one is under a company license or subscription, allowing for easy transfer of ownership in many cases by granting access.
- Register all plugins and software under the same company or Gmail email address, so you can simply grant access to that account rather than having to cancel or transfer access.
- At some point, move the marketing site and application to a separate hosting account. It was a challenge to transfer the sites and WPEngine accounts to a new owner from my main account twice.
6. Enterprise Security Controls
Security isn’t just technical—it’s operational. Large buyers will evaluate how well you manage users, logins, access, and response protocols. Even if you’re not SOC 2 certified, you need to show structure.
Policy Documents:
- Password and 2FA policies
- SSO/SAML support (if applicable)
- Access logs, change tracking, and IAM structure
Keep a folder of policies and evidence ready for review. Many of them are just a few pages that you can find examples of on the internet. Often, your first enterprise client will either provide examples or request changes to yours, which can be very helpful.
7. Data Compliance and Privacy Documentation
If you collect or store data, you’re subject to privacy laws. Even if you’re a small shop, enterprise clients won’t risk buying or using your product if your data handling isn’t above board. Most SaaS use third-party payment processors, so you are not storing credit card data. However, even for fully public URLs in Hreflang Builder, we often had to demonstrate compliance with data privacy. Nearly all will want to see your GDPR/CCPA/SCC compliance records and a log of processing any removals.
Compliance Maintain:
- Privacy policies and terms of service must be kept current to ensure they cover what you collect and store.
- Data flow diagrams and subprocessor lists
- GDPR/CCPA/SCC compliance records
- Consent mechanisms and retention policies
8. Pre-existing IP and Third-Party Tools
Can you clearly tell what parts of your product were built in-house, and what’s licensed, borrowed, or reused? If not, buyers will assume the worst—and you’ll be on the hook to prove otherwise. If you use multiple APIs, can you show that you have a license and/or can use them commercially?
Create a disclosure document that lists:
- Internal frameworks or reused code
- Third-party APIs, SDKs, or libraries
- Licensing type and usage scope
- Any AI-generated assets or code (with tool names and dates)
9. Contract Red Flags Buyers Look For
They will review your contracts—especially those with clients and vendors looking for potential landmines. You need to flag and address any issues that limit your ability to grow, sell, or transfer your product. Some larger clients may have requirements related to transfer, ownership, or management that void the contract or open it up for renegotiation.
Take a look at my article on Exit Multipliers – What Acquirers Really Pay for to organize all of your subscription/licensing contracts, billing information, and client details so that it is easy to validate.
Audit contracts for:
- IP ambiguity
- Exclusivity clauses
- Revenue-sharing or royalty terms
- Long-term obligations or reseller lock-ins
Identify any issues or gaps and fix them before diligence begins, not during. A key gap can exist between your application’s terms of service and those in your Master Services Agreement or Scope of Work. Often, hybrid agencies include their software as part of the engagement and create accounts for the client, thereby bypassing the client’s acceptance of the terms. I had this issue with a few clients and had to get them to accept the TOS.
10. Your Origin Story—Made Audit-Ready
You may have this information on the website, but can you clearly explain how your software came to be, who helped build it, and what has been added along the way? If not, your story may raise doubts. Consistency builds trust, and showing pivots and other realignments helps build authenticity.
Write a short internal brief that outlines:
- Product timeline and contributors
- Client co-funding or grants
- MVP → v1 → current architecture
- What’s proprietary, what’s licensed
Include a simple system diagram if needed. This becomes your narrative anchor in investor or acquisition conversations.
Closing the loop between development and operations
Everything here assumes you built your product on a strong foundation. But if you missed Part One, go back and read it—it covers how to build software that’s legally ownable, structurally compliant, and low-risk from day one.
Read Part One: Software Compliance and Ownership Essentials
Legal Disclaimer
The information in this article is based on personal experience and industry best practices, but it does not constitute legal advice. I am not a lawyer, and the content provided here is for informational purposes only. For any decisions involving intellectual property, licensing, software contracts, or compliance, you should consult a qualified software or technology attorney familiar with your jurisdiction and business model.
