The Holi-days of Diligence
Due diligence isn’t a checklist. It’s a sequence of moments. each one small, but none of them insignificant.
The Days of Due Diligence
Due diligence is often described as a checklist. In practice, it feels more like a series of days. It’s not consecutive, not orderly, and rarely predictable.
Each “day” brings a familiar moment, small on its own, but cumulative in effect. Together, they shape momentum, confidence, and ultimately whether a deal feels inevitable… or fragile.
Understanding these moments and how to respond to them is often the difference between a controlled process and one that slowly unravels.
Day One: The “Quick Question”
It usually starts with a simple question, often one that’s already answered in the CIM.
This isn’t because the buyer didn’t read it. It’s because they want to hear how you answer it.
There’s an old lawyer’s rule that applies perfectly here: answer the question that was asked and nothing more. Founders are understandably proud of what they’ve built, but in diligence, over-explaining can open the door to follow-ups you’re not prepared for.
The example I always use is this: if someone asks whether you know what time it is, the correct answer isn’t “Yes, it’s 12:45.” It’s simply, “Yes.”
Buyers are listening for accuracy. Discipline lets you answer the right question and recognize when absolute precision matters enough that the answer belongs in writing, on the record. This is less about caution and more about control.
Day Two: The Second Model
At some point, a second model appears.
Built by someone else on the buyer’s team. Using the same inputs, but sometimes differently. Assumptions shift. Interpretations change. Outputs diverge, and that’s not a problem; it’s expected. You want buyers to form their own views.
What matters is having a clear, agreed-upon baseline. A formal data book with the numbers gives everyone a single reference point so disagreements stay analytical, not emotional.
If a new model is going to be built, it should at least start where you left off.
Day Three: The Clarifying Question
This question often sounds small.
“Can you walk us through how pricing really works?” or “Help us understand customer churn a bit better.”
For strategic buyers, these are usually narrative tests, a way to confirm they didn’t miss anything.
For financial buyers, they’re often more earnest. They may genuinely be learning your industry’s pricing model for the first time.
But there’s a limit. Assuming the CIM is solid and the data book contains real information, there are only so many clarifying questions a buyer can reasonably ask before momentum slows.
In the final, confirmatory diligence, that’s expected. Earlier in the process, it can become a powerful signal, an attempt to know everything before making an offer. At that point, diligence stops clarifying and starts delaying. Knowing when that line has been crossed is a core judgment call in any well-run process.
Day Four: The Data Room Re-Upload
You upload the file. Then the updated file. Then the “final” file. Then final_final_v3_REVISED.xlsx.
At some point, version control becomes its own workstream. Minor edits multiply. Small clarifications ripple across multiple documents.
None of this is unusual. But confusion, especially around which version is “right,” creates unnecessary friction. Left unmanaged, friction tends to slow everything down.
Day Five: The Quiet Day
Sometimes it isn’t a quiet day. It’s quiet days.
Lawyers are reading 80-page purchase agreements. Redlines are circulating. Advisors are updating models. Accountants are running tax scenarios.
None of this requires the buyer or seller on every call. But silence is deafening. When things are moving, it feels like there should be noise. There often isn’t. This is where trust in your advisors matters most and where unnecessary interference usually creates more friction, not less.
Day Six: The Late-Night Scheduling Email
“Can everyone do 7:30 am tomorrow?”
Roughly thirty days before a target closing date, time stops behaving normally. Calls run long. Timelines get revised. Decisions stack up. And inevitably, someone is on vacation.
Calendars collide. Momentum stalls, briefly, but noticeably. It’s rarely fundamentals that slow deals at this stage.
It’s logistics. Recognizing that distinction keeps anxiety from masquerading as urgency.
Day Seven: The Hill
This is the moment when momentum either carries the deal forward… or the rock gets stuck.
A blown closing date at the eleventh hour is rarely a good sign.
But a rescheduled closing, agreed upon weeks in advance, is often just logistics. Documents take longer. Approvals slip. Someone is travelling. None of it needs to be over-interpreted.
Nothing dramatic has changed, but energy shifts. Misreading that shift, in either direction, is where otherwise good deals get mishandled. This is where judgment matters most: knowing the difference between a deal losing conviction and a process simply adjusting to reality.
A Final Thought
Due diligence isn’t hard because it’s technical. It’s hard because it’s cumulative.
Each day on its own is manageable. Together, they test alignment, stamina, and trust.
The best processes don’t eliminate friction; they anticipate it, manage it, and keep momentum intact when it matters most. And momentum, once lost, is far harder to rebuild than most owners expect.
Thinking about a transaction?
Due diligence works best when momentum is managed intentionally. If you’re starting to plan a sale, capital raise, or strategic transition, our resources are designed to help owners prepare early and avoid unnecessary friction.