Due Diligence

Don’t Stop the Train

Due Diligence is the period after the letter-of-intent is signed and before the close, when the buyer is allowed to examine the books and records of the company.  What is the purpose of due diligence?

1. Verify that what the seller represented is true and correct
2. Identify risks, some that may be handled by language in the purchase agreement, and some that may not be
3. Understand the accounts, relationships, employee wages and benefits, etc., so that a transition of ownership can occur

This module starts by taking an overall view of DD and where it fits in the entire sales process, and how important it is for the business owner to remember that.  We then look at what DD typically consists of, and finally we look at an actual populated virtual data room at some details of an actual deal in DD.