Digital & Lower Middle Market

FE International transaction diligence

Published · Reviewed by The Diligence Standard Team · Updated

Use an institutional diligence lens: QoE/revenue quality, cohorts, customer contracts, NWC/debt-like items, technical/product diligence, IP, cyber, management and transaction structure.

Diligence focus

  • QoE and revenue quality
  • Cohorts/churn
  • Customer contracts
  • NWC/debt-like items
  • Technical diligence
  • IP/cyber
  • Management depth
  • Deal structure

First evidence requests

  • Monthly trial balance/QoE package
  • Customer ARR/revenue detail
  • Cohorts/churn
  • Contracts
  • NWC history
  • Debt-like items
  • Technical architecture/security
  • IP and employee/contractor assignments

Warning signals

  • High growth obscures cash burn or working capital
  • ARR quality is weak
  • Technical debt is deferred
  • Customer concentration is understated
  • Management depends on founders
  • Deal adjustments are left until definitive documents