Part 3. Due Diligence & Deal Structuring
3. Due Diligence & Deal Structuring: Digging for Gold
Now it’s time to get deep into the details. Don’t screw this up.
Due Diligence: Time to go through their books and get the dirt. You want to know:
Financials: Are their numbers legit? Can they pay off debt? Are they profitable, or is it all smoke and mirrors?
Legal Stuff: Any lawsuits? Compliance issues? Contracts that could go sour? Find out what skeletons they’re hiding.
Operations: Is their business model solid? Are they running at full capacity, or are they a disaster waiting to happen?
Culture: Can you work with these guys? If you merge, is it going to be a smooth transition, or will it be a nightmare?
Financing:
How are you going to pay for this? Cash, debt, equity, or a mix? Secure the financing now, so you’re not scrambling later.
Negotiate the Deal:
Once you’re comfortable with the target, hammer out the fine details: price, payment terms, warranties, and any contingencies (like board or regulatory approvals). Get it on paper.
