Due Diligence Checklist
Workflow
Step 1: Scope the Diligence
Ask the user for:
- Target company: Name, sector, business model
- Deal type: Platform acquisition, add-on, growth equity, recap, carve-out
- Deal size / complexity: Determines depth of diligence
- Key concerns: Any known issues to prioritize (customer concentration, regulatory, environmental, etc.)
- Timeline: When is LOI / close targeted?
Step 2: Generate Workstream Checklists
Generate a checklist across all major workstreams, tailored to the sector:
Financial Due Diligence
- Quality of earnings (QoE) — revenue and EBITDA adjustments
- Working capital analysis — normalized vs. actual
- Debt and debt-like items
- Capital expenditure (maintenance vs. growth)
- Tax structure and exposure
- Audit history and accounting policies
- Pro forma adjustments (run-rate, synergies)
Commercial Due Diligence
- Market size and growth (TAM/SAM/SOM)
- Competitive positioning and market share
- Customer analysis — concentration, retention, NPS
- Pricing power and contract structure
- Sales pipeline and backlog
- Go-to-market effectiveness
Legal Due Diligence
- Corporate structure and org chart
- Material contracts (customer, supplier, partnership)
- Litigation history and pending claims
- IP portfolio and protection
- Regulatory compliance
- Employment agreements and non-competes
Operational Due Diligence
- Management team assessment
- Organizational structure and key person risk
- IT systems and infrastructure
- Supply chain and vendor dependencies
- Facilities and real estate
- Insurance coverage
HR / People Due Diligence
- Org chart and headcount trends
- Compensation benchmarking
- Benefits and pension obligations
- Key employee retention risk
- Culture assessment
- Union/labor agreements
IT / Technology Due Diligence (for tech-enabled businesses)
- Technology stack and architecture
- Technical debt assessment
- Cybersecurity posture
- Data privacy compliance (GDPR, CCPA, SOC2)
- Product roadmap and R&D spend
- Scalability assessment
Environmental / ESG (where applicable)
- Environmental liabilities
- Regulatory compliance history
- ESG risks and opportunities
Step 3: Status Tracking
For each item, track:
| Item |
Workstream |
Priority |
Status |
Owner |
Notes |
| QoE report |
Financial |
P0 |
Pending |
|
|
| Customer interviews |
Commercial |
P0 |
In Progress |
|
3 of 10 complete |
Status options: Not Started → Requested → Received → In Review → Complete → Red Flag
Step 4: Red Flag Summary
Maintain a running list of red flags discovered during diligence:
- What was found
- Which workstream
- Severity (deal-breaker / significant / manageable)
- Mitigant or path to resolution
- Impact on valuation or deal terms
Step 5: Output
- Excel workbook with tabs per workstream (default)
- Summary dashboard: % complete by workstream, outstanding items, red flags
- Weekly status update format for deal team
Sector-Specific Additions
Automatically add relevant items based on sector:
- Software/SaaS: ARR quality, cohort analysis, hosting costs, SOC2
- Healthcare: Regulatory approvals, reimbursement risk, payor mix
- Industrial: Equipment condition, environmental remediation, safety record
- Financial services: Regulatory capital, compliance history, credit quality
- Consumer: Brand health, channel mix, seasonality, inventory management
Important Notes
- Prioritize P0 items that are gating to LOI or close
- Flag items where the seller is slow to respond — may indicate issues
- Cross-reference data room contents against the checklist to identify gaps
- Update the checklist as diligence progresses — it's a living document
1---2name: fsi-pe-due-diligence-checklist3description: Generate and track comprehensive due diligence checklists tailored to the target company's sector, deal type, and complexity. Covers all major workstreams with request lists, status tracking, and red flag escalation. Use when kicking off diligence, organizing a data room review, or tracking outstanding items. Triggers on "dd checklist", "due diligence tracker", "diligence request list", "what do we still need", or "data room review".4---56# Due Diligence Checklist789## Workflow1011### Step 1: Scope the Diligence1213Ask the user for:14- **Target company**: Name, sector, business model15- **Deal type**: Platform acquisition, add-on, growth equity, recap, carve-out16- **Deal size / complexity**: Determines depth of diligence17- **Key concerns**: Any known issues to prioritize (customer concentration, regulatory, environmental, etc.)18- **Timeline**: When is LOI / close targeted?1920### Step 2: Generate Workstream Checklists2122Generate a checklist across all major workstreams, tailored to the sector:2324**Financial Due Diligence**25- Quality of earnings (QoE) — revenue and EBITDA adjustments26- Working capital analysis — normalized vs. actual27- Debt and debt-like items28- Capital expenditure (maintenance vs. growth)29- Tax structure and exposure30- Audit history and accounting policies31- Pro forma adjustments (run-rate, synergies)3233**Commercial Due Diligence**34- Market size and growth (TAM/SAM/SOM)35- Competitive positioning and market share36- Customer analysis — concentration, retention, NPS37- Pricing power and contract structure38- Sales pipeline and backlog39- Go-to-market effectiveness4041**Legal Due Diligence**42- Corporate structure and org chart43- Material contracts (customer, supplier, partnership)44- Litigation history and pending claims45- IP portfolio and protection46- Regulatory compliance47- Employment agreements and non-competes4849**Operational Due Diligence**50- Management team assessment51- Organizational structure and key person risk52- IT systems and infrastructure53- Supply chain and vendor dependencies54- Facilities and real estate55- Insurance coverage5657**HR / People Due Diligence**58- Org chart and headcount trends59- Compensation benchmarking60- Benefits and pension obligations61- Key employee retention risk62- Culture assessment63- Union/labor agreements6465**IT / Technology Due Diligence** (for tech-enabled businesses)66- Technology stack and architecture67- Technical debt assessment68- Cybersecurity posture69- Data privacy compliance (GDPR, CCPA, SOC2)70- Product roadmap and R&D spend71- Scalability assessment7273**Environmental / ESG** (where applicable)74- Environmental liabilities75- Regulatory compliance history76- ESG risks and opportunities7778### Step 3: Status Tracking7980For each item, track:8182| Item | Workstream | Priority | Status | Owner | Notes |83|------|-----------|----------|--------|-------|-------|84| QoE report | Financial | P0 | Pending | | |85| Customer interviews | Commercial | P0 | In Progress | | 3 of 10 complete |8687Status options: Not Started → Requested → Received → In Review → Complete → Red Flag8889### Step 4: Red Flag Summary9091Maintain a running list of red flags discovered during diligence:92- What was found93- Which workstream94- Severity (deal-breaker / significant / manageable)95- Mitigant or path to resolution96- Impact on valuation or deal terms9798### Step 5: Output99100- Excel workbook with tabs per workstream (default)101- Summary dashboard: % complete by workstream, outstanding items, red flags102- Weekly status update format for deal team103104## Sector-Specific Additions105106Automatically add relevant items based on sector:107- **Software/SaaS**: ARR quality, cohort analysis, hosting costs, SOC2108- **Healthcare**: Regulatory approvals, reimbursement risk, payor mix109- **Industrial**: Equipment condition, environmental remediation, safety record110- **Financial services**: Regulatory capital, compliance history, credit quality111- **Consumer**: Brand health, channel mix, seasonality, inventory management112113## Important Notes114115- Prioritize P0 items that are gating to LOI or close116- Flag items where the seller is slow to respond — may indicate issues117- Cross-reference data room contents against the checklist to identify gaps118- Update the checklist as diligence progresses — it's a living document
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