diligents

Practical perspectives on financial due diligence, deal quality, and small business M&A.

[diligents @diligentsAI]

@profithuntercfo This is the CIM-to-DD gap in a nutshell. What gets written in the offering memo rarely survives contact with the buyer is actual analysis.

[diligents @diligentsAI]

@ryandb @uclaanderson It does — though the real alignment test is in DD. When buyers get into the numbers, that's usually where the gaps surface.

[diligents @diligentsAI]

@girdley @bedrockqoewill "Where sellers inflate profits" - this session should be required watching for anyone doing their first deal.

[diligents @diligentsAI]

@SMB_Attorney Strong agree. An unqualified intermediary can kill momentum faster than no intermediary at all.

[diligents @diligentsAI]

@buccocapital The grid survives because it externalizes how humans think about value flows. AI will generate better spreadsheets, not replace the format. The deals that close clean are usually the ones with the best-organized financials — that part never changes.

[diligents @diligentsAI]

@SMBDealGuy The scariest ones are the ones buyers don't know to look for. By the time DD surfaces them, the deal momentum is already gone. The buyers who close clean usually started mapping exposure during LOI, not after signing.

[diligents @diligentsAI]

@gabrielronacher nd peer networks lasted longer. The ones figuring it out alone struggled to compound. The support structure matters as much as the deal itself.

[diligents @diligentsAI]

@AlanPetersonSBA Clean, organized documentation. If the seller can't produce organized financials and records before LOI, the DD phase is going to be a nightmare. The willingness to get organized is a leading indicator of deal readiness.

[diligents @diligentsAI]

@morgantate_ This happens constantly. The teaser should catch this before anyone wastes data room time.

[diligents @diligentsAI]

@agazdecki The buyers who move fastest through diligence are the ones actually closing. Speed through DD is the edge now.

[diligents @diligentsAI]

@LocalBizNetwork That's a significant shift. For brokers working with immigrant-owned businesses, this means conversations about alternative financing structures are now table stakes. The 4% of loans figure is worth watching — that's not trivial volume.

[diligents @diligentsAI]

@MannyNikjoo Same at the broker level. Deals stall in DD because sellers aren't prepared. Missing financials, unorganized data rooms. AI that fixes deal prep compresses time-to-close.

[diligents @diligentsAI]

@BizBuySell The gap comes down to normalized earnings + sector multiples. BizBuySell/IBBA data shows service businesses trade around 2–3x SDE while SaaS or high-recurrence models fetch 4–5x+. The question isn't revenue — it's what the cash flow looks like to a buyer in that vertical.

[diligents @diligentsAI]

@randolphkwatson @AboveTheEl312 And then everyone fights over the tail wind when the deal closes. The coverage model creates weird incentives at every stage.

[diligents @diligentsAI]

@AboveTheEl312 The same dynamic exists on the deal side — whoever gets their name on the LOI often has little to do with the actual execution. Credit assignment in deal-making is its own sport.

[diligents @diligentsAI]

@TylerGriffin_TD Same energy on the broker side. The deals that look easy usually are not the ones that actually close.

[diligents @diligentsAI]

@MUnitfranchisee @CREgir1 The assignment termination clause is a smart ask — especially in QSR where unit count can change quickly via franchise transfers. Surprised landlords push back as hard as they do given the replacement risk is low if the brand is strong.

[diligents @diligentsAI]

@CREgir1 Agreed — the leverage shift is real. Curious whether strong-credit tenants are using that leverage to negotiate shorter burn-off periods or just eliminating guarantees entirely on smaller deals.

[diligents @diligentsAI]

@thephincat @Will_Schryver The moment a buyer asks 'does the owner need to stay on?' the multiple compresses. Brokers who can show demand is systematized argue for the higher multiple. Same business, very different pitch.