Fintech: Exit Checklist for Founders

The time has come to sell your FinTech. But what steps do you have to take to get ready?
Exit Sign

Jens Jennissen

You have fought tooth and nail to build your Fintech from the ground up. Hired (and probably fired) employees, created a business with its own unique company culture, and raised money, maybe even doing it with what seemed like all odds stacked against you.

Now, the time has come to sell the company. The reasons can be manifold.

Maybe your VC investors have funds that are near the end of their life-time and so they need to exit the investment. Maybe you cannot raise additional funding and are not profitable so you need to sell to avoid insolvency. Maybe you and your co-founders want to cash in on that notorious offer that you just can’t refuse.

Whatever the reason, you have now successfully found a buyer and agreed on price, deal structure and even term sheet. Your board and your investors are supporting the deal.

I know that when I was in the process of selling my first company, my spirits, expectations and stress level were all quite high. There is only one step left before you can sign the deal, and that pivotal final step is due diligence.

If you have been through a funding round with a professional investor such as a VC fund, you know roughly what to expect and there is no need to get cold feet. The due diligence during a sales process will be similar but broader and more thorough because the buyer has a fiduciary responsibility to their shareholders and is stuck with your company after the deal, so naturally they want to take a good look under the hood. 

A professional due diligence process covers financial, legal, tax, environmental, human resources, and operational aspects. While it is crucial to avoid deal breakers in any area, a Fintech context offers unique aspects in finance, legal and operations compared to other businesses such as e-commerce. These aspects are critical to take into account, so each one is individually elucidated below.

Financial due diligence

Some points of the financial due diligence were probably already cleared during the price negotiation. There are a number of questions that the interested purchasing party is going to be asking themselves that you want to consider at this stage. Do the numbers match the story? What is the business plan? Are the financial accounts in good order?

Here, audited financial statements can help greatly to build confidence in your numbers. If the financial accounts for the most recent business year are not yet ready, it might make sense to accelerate the completion.

Legal due diligence

Legal due diligence generally covers various topics around corporate documents, commercial licenses, labor contracts and many more. 

Increasingly important in an EU context is data security and data privacy regulation. This is particularly relevant for a Fintech, which obtains and processes sensitive personal data surrounding financial status and goals, income and assets. So make sure (ideally beforehand) that your processes and setup are compliant but also well documented. Documentation allows a lawyer doing the due diligence to verify your statements regarding compliance. Creating documentation along the way can be costly and delay the process.

A particular aspect of Fintech legal due diligence is the regulatory side of the business. Most Fintechs operate in a heavily regulated setting, which requires additional licenses and processes. Make sure your licenses are up to date, which they should be irrespective of a sales process, and your regulatory reports are filed. Again, accelerating any outstanding filings and audits is worthwhile.

Most Fintechs do not operate the whole value chain themselves but often use partners for substantial parts of the process or even use a partner’s license to operate. Whether you are a robo-advisor operating as a tied-agent or a neo-bank using someone else’s banking license and infrastructure, you are relying on a third party for vital parts of your business. 

A diligent buyer will analyze this setup in detail. What are the contracts with your partners like? What happens in a change-of-control situation? How are your partners going to react to your company being owned by someone else? Your buyer might also want to do some due diligence on your partner so make sure you bring them on board at the right time as well.

Operational due diligence

Operational due diligence may often be somewhat neglected in M&A. It can focus on research and development, logistics, procurement or other processes. 

Fintech, is somewhat unique due to the regulatory landscape in which Fintechs operate and resulting obligations on how to handle customers and their data.

Starting at the beginning of the customer journey, your customer onboarding will be analyzed. Are you in compliance with all regulations on offering financial services and selling financial products and are you obtaining all necessary information from customers? 

You can also expect to answer questions around know-your-customer (KYC) and anti-money-laundering (AML) obligations and related processes. 

This part of the operational due diligence naturally intersects with the legal side.

In addition, your customer service processes might be scrutinized. Not only is a robust customer service process important to any business but a Fintech company might have regulatory obligations on recording phone conversations with customers and on logging customer complaints (and on storing the data in a compliant way – data protection once again) while facing restrictions on providing financial advice. 


In my experience, the due diligence for a Fintech company during a sales process is similar yet more detailed and comprehensive than a due diligence during a funding round. Preparing ahead of the sales process by collecting documents and bringing stakeholders on board can accelerate the process later on and keep the important deal dynamic going. 

Compared to businesses, which operate in a less-regulated environment, a Fintech will face scrutiny on regulatory approval, KYC and AML, as well as customer related processes and data privacy topics. 

It may seem like a daunting process at first glance, but if you have already made it this far, then now is the time to make sure you have everything covered down to the last detail, as you reach the home stretch of the long-awaited sale.

About the author

Jens Jennissen

Jens made the journey from energy trader to FinTech entrepreneur to advisor. Now he helps companies in FinTech and blockchain to navigate strategic, regulatory, and business development challenges as a freelance consultant.