The Diligence Question Bank
System 3 of 4 · THE QUESTIONS YOU'D FORGET · The Deal Kit
The questions a ten-person deal team would ask without thinking, organised by area so nothing slips. Use them to build your management-meeting list and your information requests. The prompt at the end tailors the bank to your specific deal.
The bank
Financial
- What's driving the revenue trend, volume, price, or new customers?
- Walk me through every add-back in adjusted EBITDA. Which survive a sale?
- How much owner compensation and personal expense is in these numbers?
- What capex is coming in the next two years that isn't in the forecast?
- How much working capital does the business need, and how seasonal is it?
- Does reported profit turn into cash, and where does the cash go?
- Have you restated or adjusted any prior-year figures? Why?
- Who prepares the accounts, and are they audited or reviewed?
Commercial / customers
- What share of revenue is the top customer? The top five?
- Which revenue is contracted vs at-will, and on what terms?
- What's your churn or repeat rate, and how is it measured?
- Have you lost any major customer in three years? Why?
- Do any contracts carry change-of-control or termination clauses?
- How much of the pipeline is committed vs hoped-for?
- Can you raise prices? When did you last, and what happened?
- Who are your real competitors, and where are you losing?
Operations & people
- What breaks if volume doubles? If it halves?
- Which systems, tools or suppliers is the business dependent on?
- What exactly do you, the owner, do day to day?
- What happens to the business the day after you leave?
- Who are the key people, are they staying, and on what terms?
- Who holds the key customer and supplier relationships?
Legal & the deal
- What licences or approvals does the business rely on?
- Any past, current or threatened litigation or disputes?
- Any contingent liabilities, guarantees or off-balance-sheet items?
- Is the IP owned, registered and assignable?
- Why are you selling, and why now?
- Are you open to an earn-out or seller note?
- What other parties looked, and why didn't it proceed?
- What's not in the data room that I should know about?
Tailor it to your deal
Paste below, with your diligence gaps and red flags.
Using the gaps and red flags from my diligence so far (pasted below), tailor this question bank to my specific deal. Keep the questions that matter, add deal-specific ones the materials raise, cut the irrelevant, and mark the deal-critical questions, the ones whose answer could end the deal. Group by Financial, Commercial, Operations & people, and Legal & the deal.
Analytical tool, not investment, legal, tax or accounting advice.
See it run on a live deal: https://os.devaland.com/sample-brief
1---2name: diligence-question-bank3description: The questions a ten-person deal team would ask without thinking, organised by area (financial, commercial, operations & people, legal & the deal), plus a prompt that tailors the bank to your specific deal. Use to build a management-meeting list or information request, when asked 'what should I ask', 'build my diligence questions', or 'prep my management meeting'.4---56# The Diligence Question Bank78*System 3 of 4 · THE QUESTIONS YOU'D FORGET · [The Deal Kit](../../README.md)*910The questions a ten-person deal team would ask without thinking, organised by area so nothing slips. Use them to build your management-meeting list and your information requests. The prompt at the end tailors the bank to your specific deal.1112---1314## The bank1516**Financial**17- What's driving the revenue trend, volume, price, or new customers?18- Walk me through every add-back in adjusted EBITDA. Which survive a sale?19- How much owner compensation and personal expense is in these numbers?20- What capex is coming in the next two years that isn't in the forecast?21- How much working capital does the business need, and how seasonal is it?22- Does reported profit turn into cash, and where does the cash go?23- Have you restated or adjusted any prior-year figures? Why?24- Who prepares the accounts, and are they audited or reviewed?2526**Commercial / customers**27- What share of revenue is the top customer? The top five?28- Which revenue is contracted vs at-will, and on what terms?29- What's your churn or repeat rate, and how is it measured?30- Have you lost any major customer in three years? Why?31- Do any contracts carry change-of-control or termination clauses?32- How much of the pipeline is committed vs hoped-for?33- Can you raise prices? When did you last, and what happened?34- Who are your real competitors, and where are you losing?3536**Operations & people**37- What breaks if volume doubles? If it halves?38- Which systems, tools or suppliers is the business dependent on?39- What exactly do you, the owner, do day to day?40- What happens to the business the day after you leave?41- Who are the key people, are they staying, and on what terms?42- Who holds the key customer and supplier relationships?4344**Legal & the deal**45- What licences or approvals does the business rely on?46- Any past, current or threatened litigation or disputes?47- Any contingent liabilities, guarantees or off-balance-sheet items?48- Is the IP owned, registered and assignable?49- Why are you selling, and why now?50- Are you open to an earn-out or seller note?51- What other parties looked, and why didn't it proceed?52- What's not in the data room that I should know about?5354---5556## Tailor it to your deal5758Paste below, with your diligence gaps and red flags.5960Using the gaps and red flags from my diligence so far (pasted below), tailor this question bank to my specific deal. Keep the questions that matter, add deal-specific ones the materials raise, cut the irrelevant, and mark the deal-critical questions, the ones whose answer could end the deal. Group by Financial, Commercial, Operations & people, and Legal & the deal.6162---6364> *Analytical tool, not investment, legal, tax or accounting advice.*6566> See it run on a live deal: https://os.devaland.com/sample-brief
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