State the value thesis
Management should identify expected benefits, key assumptions, and the conditions required for value creation before diligence begins.
Focus on failure points
Customer retention, management continuity, systems, margins, culture, capital requirements, and integration capacity deserve attention in proportion to their importance.
Connect findings to terms
Diligence should influence valuation, structure, protections, closing conditions, and the integration plan. A finding without a decision consequence is merely information.
Questions for Owners
Questions worth considering
- Which assumptions drive the valuation?
- What finding would cause the buyer to stop?
- How will identified risk change price, terms, or integration?