In performing due diligence, I recommend you look not only for risks but also for opportunities. That’s how I approach due diligence for our Capstone clients. As we examine the seller’s operations and books, we place every new discovery in one of three color-coded “buckets:” Red Bucket: Deal Changers. This is information that materially alters …
Tag: early due diligence
5 Approaches to Risks Identified Through Due Diligence
During due diligence, you may uncover deal-changing issues, or what I like to call “red bucket items.” Identifying these risks doesn’t necessarily mean you walk away from a deal, but you will need to negotiate new terms with the seller. Among the ways to protect yourself as the buyer when you find major issues: 1. …
Signs You May Be Buying the Wrong Company
Buying the right company is essential, but it is difficult. It may be easier to eliminate the “wrong” companies – prospects with glaring due diligence issues such as theft or lawsuits, or even more subjective issues like a poor cultural fit. However, the decision is not always so black and white. How can you know …
Uncovering Liabilities Early On
The message I want to share with you here is simple but critical: start your due diligence early. In fact, start it the moment you begin the acquisition process. Conducting due diligence uncovers liabilities or hidden problems that can decide the success or failure of an acquisition. This could include issues such as past litigation, …
