Founders dream of a great acquisition or IPO. Deals close when the finance story is clean, complete, and credible. A fractional CFO makes that happen, fast. Below is a skimmable guide to exit readiness for tech, fintech, and crypto teams.

Financial due diligence readiness

Buyers expect accurate, up to date, GAAP compliant financials. The goal is simple, no surprises.

Be ready with

• Two to three years of income statements, balance sheets, and cash flows
• Monthly closes with reconciled cash, AR, AP, inventory, and equity
• Clear revenue recognition policies and support schedules
• Audited or reviewed statements when possible
• A quality of earnings view that separates recurring from one time items

A fractional CFO runs an internal diligence sweep first, fixes gaps, and builds trust before any buyer opens the data room.

Systems, controls, and documentation

Exit readiness is not only numbers, it is proof behind the numbers.

Put in place

• A reliable GL or ERP, accrual accounting, and close calendar
• Segregation of duties, approval workflows, and documented policies
• A clean capitalization table with grant letters, SAFEs, and notes
• A key contracts library, customers, vendors, loans, leases, and any change of control terms
• Corporate records, bylaws, minutes, board consents
• IP ownership files and assignments for employees and contractors
• HR files, offers, equity, compliance with payroll and classification rules

Stand up a secure virtual data room early. Use a clear index, read only access, watermarks, and an update log.

Valuation, deal structure, and stakeholder alignment

Your fractional CFO is the financial architect.

Valuation

• Builds DCF, market multiples, and precedent comps
• Normalizes earnings and highlights drivers, retention, margins, unit economics
• Models synergies to support a better price

Deal structure

• Evaluates cash, stock, and earn outs, and their tax and risk tradeoffs
• Negotiates working capital and escrow mechanics
• Protects value by challenging unfair adjustments

Stakeholders

• Aligns founders, board, investors, and key employees
• Coordinates buyers, bankers, auditors, and counsel
• Crafts clear internal and external communications

Fintech and crypto specifics

Fintech

• Prove AML and KYC design and evidence of use
• Show PCI approach, partner bank agreements, and licenses
• Present reserves for chargebacks, fraud, and loan losses
• Provide detailed volume, take rate, and loss metrics

Crypto and digital assets

• On chain accounting that reconciles every wallet and smart contract
• Treasury policies for volatility, stablecoin and fiat mix, and impairment
• Smart contract audits, custody controls, and chain analytics for AML
• Clear token economics, distribution, and legal opinions

Step by step exit timeline

T minus 18 months, assess and clean

• Mock diligence, accounting cleanup, and optional QoE
• Fix revenue policies and reconciliations, document everything

T minus 12 months, strengthen

• Upgrade systems, speed the monthly close, lock controls
• Build the data room skeleton and start populating

T minus 12 to 6 months, forecast and package

• Build three to five year forecasts with scenarios
• Create cohort, retention, and margin narratives supported by data

T minus 6 to 3 months, remove red flags

• Resolve tax, IP, contract, and compliance gaps
• Line up customer consents and key employee retention

T minus 3 months to close, execute

• Manage Q&A, deliver schedules fast, and finalize pricing mechanics
• Prepare working capital true up and integration plans

Red flags that cut value or kill deals

• Inconsistent financials or unreconciled accounts
• Surprises in the cap table or undocumented equity promises
• Unclear IP ownership or pending disputes
• Missing licenses or weak compliance evidence
• Customer concentration with fragile contracts
• Hidden liabilities, taxes, refunds, or covenant breaches
• No plan to retain key people

Your CFO finds and fixes these early, then documents the fix.

Tie exit planning to forecasting, risk, and reporting

• Forecasting: link strategy to a target valuation and model the path to it
• Risk: identify top risks, add controls, and show mitigation in writing
• Investor reporting: share board grade KPIs, cohorts, and budget versus actuals each quarter so nothing is a surprise

Quick exit readiness checklist

• Two to three years of GAAP financials and monthly closes
• Quality of earnings or equivalent analysis
• Clean cap table and ESOP ledger
• Contracts indexed, key clauses flagged
• Policies for revenue, approvals, security, privacy, AML and KYC
• Data room live with index and update log
• Forecast model with scenarios and sensitivity
• Red flags identified, remediated, and documented
• Retention plan for critical talent

Conclusion and next step

Great exits reward preparation. A fractional CFO cleans the books, builds controls, packages the story, and guides valuation and structure so you close at the best terms with fewer surprises. RFS’s audit preparation and exit‑readiness services guide you through valuations, due diligence and regulatory filings for a successful M&A or IPO.

Reviewed by YR, CPA
Senior Financial Advisor