Guide 05 · for owners and deal teams
What a buyer's diligence will ask for, and how to have it ready a year early
Every sale process asks the same questions in roughly the same order. The companies that sell well answered them before anybody asked.
By Cristian Paun · partner, Value Creation and Growth · Makers of New
The short answer
Write down everything a buyer's advisers will ask for, mark each item held, partial or missing, and work the missing ones in the order a buyer prices them. Start a year before anybody names a date. Name your own open items first, because a finding a buyer makes is a discount and an item a seller volunteers is a disclosure.
Why it matters now
Longer holds mean more exits happen in difficult markets, where buyers take their time and every unanswered question becomes a price conversation.
How to do it
- Use the buyer's list. Revenue quality, margin, the plan, the record, people and continuity, technology and data, legal and regulatory, and the open items.
- Mark each item honestly. Held, partial or missing, with how it is known.
- Give every missing item an owner and a date.
- Start with revenue quality. Revenue by customer and product, recurring share, concentration and a pipeline that reconciles to booked revenue are read first.
- Reconcile everything to the accounts. A CRM figure that does not reconcile to finance becomes a question about every other figure.
- Write the open items yourself. Three honest lines here buy more trust than thirty pages of data room.
- Read the list every quarter. It should be complete six months before a sale, and stay complete.
What good looks like
SIMULATION, an invented company.
| Group | Items | Held | Ready |
|---|---|---|---|
| Revenue quality | 5 | 4 | 80% |
| Margin | 4 | 3 | 75% |
| The record | 3 | 3 | 100% |
| The open items | 1 | 1 | 100% |
Where it goes wrong
- The pack is written in the eight weeks before launch. That is when a buyer expects it to have been written, and reads it accordingly.
- The numbers do not reconcile. One mismatch starts a recount.
- The weaknesses are left for the buyer to find. They will be found, and priced.
The instrument
The Exit Read reads the buyer's checklist against what a MakersOS room already holds and computes how ready the company is, group by group. The room's own exports become the exit file, kept current by every quarterly close.