Acquirer Red Team Skill
Every acquisition has two diligence processes: the polite one in the data room, and the internal one where the deal team lists reasons to retrade the price. This skill runs the second one early. (The mirror-image skill is financial-due-diligence — that's you examining others; this is them examining you.)
What This Skill Produces
- The internal red-flags memo — what the acquirer's team flags, category by category, with a price-chip estimate per finding
- The retrade script — the sentence they'll use to reopen price for the biggest flag
- The debrief — out of character: which flags are fixable pre-process, in what order, and which you must simply pre-disclose
Required Inputs
Ask for these if not provided:
- The business — revenue (recurring vs one-time), growth, team size, customer count and concentration, stack age, anything sensitive the user already knows about
- The deal frame (optional) — strategic vs PE buyer, rough multiple expectation; default to a strategic acquirer
- Skeletons (optional but powerful) — the things the user hopes nobody asks about; the simulation is only as useful as this input is honest
Framework: The Five Hunting Grounds
| Category |
What chips price |
Typical chip size |
| Revenue quality |
Non-recurring dressed as recurring, discount-bought renewals, related-party revenue, pilot revenue counted as land-and-expand |
Multiple compression — the biggest lever |
| Concentration |
Any customer >15–20%, channel dependence, one geography |
Escrow/earnout territory |
| Key-person risk |
Founder-held relationships, single-maintainer systems, no second-in-command |
Retention packages carved from YOUR proceeds |
| Tech & IP |
Un-transferable licenses, unclear IP assignment (contractors!), tech debt that implies post-close spend |
Dollar-for-dollar price cuts |
| Legal & compliance |
Open disputes, data-protection exposure, misclassified contractors, missing customer consents for assignment |
Indemnities, holdbacks, or walk-aways |
Per finding, estimate the chip as a range and mechanism (multiple compression / holdback / earnout shift / retention carve-out). Ranges must be defensible from the input; label all assumptions.
Output Format
Project [codename]: Diligence Red Flags — INTERNAL
Simulation — a plausible adversarial reading, not a prediction or financial advice.
Summary Box
Asking frame · our current view · total identified chips (range) · walk-away risks: [n]
Findings
| # |
Category |
Finding |
Evidence we'd request |
Price mechanism |
Chip estimate |
The Retrade Script
[The exact paragraph the corp-dev lead says on the call for finding #1.]
Debrief — out of character
| Finding |
Fixable pre-process? |
Fix and time-to-fix |
Or: pre-disclose how |
One paragraph: the order of operations for the next two quarters, and the one finding to pre-disclose rather than fix (credibility is also an asset).
Route through your M&A counsel and banker before a real process — this is a stress test, not deal advice.
Quality Checks
Anti-Patterns
1---2name: acquirer-red-team3description: Simulate the acquirer's diligence team hunting for reasons to cut your price — their internal red-flags memo with a price-chip estimate per finding. Use when asked to red-team my company before a sale, how will an acquirer attack our valuation, pre-diligence audit, or what will DD find. Produces the acquirer's internal memo (revenue quality, key-person, tech debt, concentration, legal) and a debrief on which flags are fixable before a process.4---5
6# Acquirer Red Team Skill
7
8Every acquisition has two diligence processes: the polite one in the data room, and the internal one where the deal team lists reasons to retrade the price. This skill runs the second one early. (The mirror-image skill is `financial-due-diligence` — that's you examining others; this is them examining you.)
9
10## What This Skill Produces
11
12- **The internal red-flags memo** — what the acquirer's team flags, category by category, with a price-chip estimate per finding
13- **The retrade script** — the sentence they'll use to reopen price for the biggest flag
14- **The debrief** — out of character: which flags are fixable pre-process, in what order, and which you must simply pre-disclose
15
16## Required Inputs
17
18Ask for these if not provided:
19- **The business** — revenue (recurring vs one-time), growth, team size, customer count and concentration, stack age, anything sensitive the user already knows about
20- **The deal frame** (optional) — strategic vs PE buyer, rough multiple expectation; default to a strategic acquirer
21- **Skeletons** (optional but powerful) — the things the user hopes nobody asks about; the simulation is only as useful as this input is honest
22
23## Framework: The Five Hunting Grounds
24
25| Category | What chips price | Typical chip size |
26|---|---|---|
27| **Revenue quality** | Non-recurring dressed as recurring, discount-bought renewals, related-party revenue, pilot revenue counted as land-and-expand | Multiple compression — the biggest lever |
28| **Concentration** | Any customer >15–20%, channel dependence, one geography | Escrow/earnout territory |
29| **Key-person risk** | Founder-held relationships, single-maintainer systems, no second-in-command | Retention packages carved from YOUR proceeds |
30| **Tech & IP** | Un-transferable licenses, unclear IP assignment (contractors!), tech debt that implies post-close spend | Dollar-for-dollar price cuts |
31| **Legal & compliance** | Open disputes, data-protection exposure, misclassified contractors, missing customer consents for assignment | Indemnities, holdbacks, or walk-aways |
32
33**Per finding, estimate the chip** as a range and mechanism (multiple compression / holdback / earnout shift / retention carve-out). Ranges must be defensible from the input; label all assumptions.
34
35## Output Format
36
37---
38
39# Project [codename]: Diligence Red Flags — INTERNAL
40
41> Simulation — a plausible adversarial reading, not a prediction or financial advice.
42
43## Summary Box
44Asking frame · our current view · total identified chips (range) · walk-away risks: [n]
45
46## Findings
47| # | Category | Finding | Evidence we'd request | Price mechanism | Chip estimate |
48|---|---|---|---|---|---|
49
50## The Retrade Script
51[The exact paragraph the corp-dev lead says on the call for finding #1.]
52
53## Debrief — out of character
54| Finding | Fixable pre-process? | Fix and time-to-fix | Or: pre-disclose how |
55|---|---|---|---|
56
57One paragraph: the order of operations for the next two quarters, and the one finding to pre-disclose rather than fix (credibility is also an asset).
58
59*Route through your M&A counsel and banker before a real process — this is a stress test, not deal advice.*
60
61---
62
63## Quality Checks
64
65- [ ] Every finding traces to the supplied facts or a labeled assumption — no invented skeletons
66- [ ] Chip estimates carry a mechanism, not just a number
67- [ ] Revenue quality is examined first and hardest — it moves the multiple
68- [ ] The debrief distinguishes fixable / disclose-and-frame / structural honestly
69- [ ] Retention-package math is called out as coming from the seller's proceeds
70
71## Anti-Patterns
72
73- [ ] Do not pull punches — the user can get cheerleading from their banker
74- [ ] Do not produce findings without price mechanics; "risk" without a chip is noise
75- [ ] Do not recommend hiding anything — the debrief may only fix or pre-disclose; concealment discovered in DD kills deals and worse
76- [ ] Do not treat PE and strategic buyers identically if the frame is known — they chip differently
77- [ ] Do not stay in character in the debrief
Mohit Aggarwal