--- title: "Is this SaaS listing legit?" url: https://firstpassmemo.com/guides/is-this-saas-listing-legit updated: 2026-10-16 publisher: FirstPass Memo (hello@firstpassmemo.com) --- Is this listing legit? # Is this SaaS listing legit? 7 red flags to check first Short answer: you cannot prove a listing is legit from the listing alone, but you can tell quickly whether its numbers hold together. For a small SaaS, check the 7 rules below first, send the seller the matching questions, and only then pay for verification. The free checker (https://firstpassmemo.com/checker/) runs all 33 rules on pasted listing text in about a minute. Updated 16 October 2026 · By Joan Murphy (https://firstpassmemo.com/about/joan-murphy/) (pen name) · How we check (https://firstpassmemo.com/methodology/) · Corrections (https://firstpassmemo.com/editorial-policy/) ## Check a listing now, free FirstPass Memo offers a free red-flag checker for business-for-sale listings and a $79 first-pass memo on a specific listing you send, paid after delivery. Paste any listing below for payback, the asking multiple and its red flags. Nothing you paste leaves your browser. Open the full checker (https://firstpassmemo.com/checker/) to unlock every flag with its seller question. ## What usually goes wrong with a small SaaS listing? For a small SaaS the listing's recurring-revenue story is the whole price. The common gaps are an MRR figure that is a forecast rather than money collected, ARR that is not 12 times MRR, a churn figure that is missing, and revenue resting on a handful of customers. "Legit" means two different things. A listing can be honest and still a bad deal, or polished and still untrue. The rules below test the first part: whether the published numbers agree with each other and with comparable listings. Only access to the seller's accounts (read-only Stripe, analytics, Search Console, the platform dashboard) can test whether they are true. ## The 7 checks that matter most, with the question to send | Rule | Severity | Ask the seller | | --- | --- | --- | | MRR above collected revenue (https://firstpassmemo.com/flags/mrr-above-revenue-collected/) | MED | Can you share a Stripe (or billing) export of money actually collected each month for the last 12 months? | | ARR and MRR disagree (https://firstpassmemo.com/flags/arr-and-mrr-disagree/) | MED | ARR is not 12 times MRR. Which is current, and how is each calculated? | | No churn figure (https://firstpassmemo.com/flags/no-churn-figure/) | MED | What were monthly customer churn and revenue churn for each of the last 12 months? | | Churn above 5% a month (https://firstpassmemo.com/flags/monthly-churn-above-5-percent/) | MED or HIGH | Which customers cancelled in the last six months, and why? | | Few paying customers (https://firstpassmemo.com/flags/few-paying-customers/) | MED | How many paying customers are there today, and what share of revenue does the largest pay? | | Top customer above 25% (https://firstpassmemo.com/flags/top-customer-over-25-percent/) | HIGH | Is the largest customer on a contract, and when does it renew? | | No connected data source (https://firstpassmemo.com/flags/no-connected-data-source/) | MED | Can you connect the revenue and analytics accounts read-only, or screen-share them live? | Rule names and severities come from our published 33-rule set (https://firstpassmemo.com/flags/) (rules.json (https://firstpassmemo.com/rules.json)). The questions are our suggested wording. ## Is the asking price in a normal range? In our October 2026 sample of 20 SaaS and software listings priced $10k–$150k, the median asking price was 28.7 months of stated profit (2.39× annual profit; middle half 1.88×–2.65×), and 50% of those that stated an age were under 12 months old. All business types: 26.8 months (2.23×, n=36). Asking prices and seller-stated profit, not sale prices (data and method (https://firstpassmemo.com/data/)). ## How do you check it in 10 minutes? - Paste the listing into the free checker (https://firstpassmemo.com/checker/) and note payback and every flag. - Send the seller the questions for each flag raised. A seller who answers clearly and offers read-only access is a good sign; one who avoids the question is a flag in itself. - Compare the answers with what the listing claimed, then decide whether this listing deserves paid verification. ## FAQ ### Can a free checker tell me if a SaaS listing is a scam? No. It tells you whether the published numbers are consistent and complete. Fraud is ruled out only by checking the seller's accounts directly, ideally on a live screen share or with read-only access. ### Which red flag matters most for a small SaaS? The high-severity ones in the table, when they appear: they mean a number is missing or contradicts another. After those, the type-specific risks above (mrr above collected revenue first). ### Should I pay for due diligence on this listing? Only once it survives the free checks and the seller's answers. A $79 first-pass memo (https://firstpassmemo.com/pricing/) (free to request, paid after delivery) ranks every flag against your own limits; human reviews cost more and work from seller documents. ## Related - How to verify Stripe revenue (https://firstpassmemo.com/answers/how-to-verify-stripe-revenue-before-buying-a-saas/) - Red flags when buying a SaaS (https://firstpassmemo.com/answers/red-flags-when-buying-a-saas/) - What churn is acceptable (https://firstpassmemo.com/answers/what-is-a-good-churn-rate-for-a-saas-you-want-to-buy/) - SaaS churn stress test (https://firstpassmemo.com/tools/saas-churn-stress-test/) - Is this listing legit? All business types (https://firstpassmemo.com/guides/is-this-listing-legit) - Glossary of listing terms (https://firstpassmemo.com/glossary/) General information, not investment, legal or tax advice. Benchmarks are asking prices and seller-stated profit. ## Looking at a specific listing? Get a full memo — $79, pay after delivery. Paste the link; your memo arrives within 24 hours (Mon–Fri). $79, pay after delivery: we send the memo first, then a payment link. Human quick reviews cost $199–$390. --- FirstPass Memo is informational screening, not investment, legal, tax, accounting or valuation advice, and not an audit. Seller figures are not independently verified. HTML version: https://firstpassmemo.com/guides/is-this-saas-listing-legit