3rd party diligence support for a smaller deal (under $300k purchase price)

searcher profile

March 03, 2025

by a searcher from The University of Chicago - Booth School of Business in New York, NY, USA

Hi all - want to gather some popular opinions on how much to invest into diligence for a small sized transaction.

Business is B2B software and customers are either on monthly/annual subscription basis with a few larger clients that pay by pay-per-use model. Not too many expenses (i.e. no marketing cost, 1 contractor HC).

Entering into LOI and have a fast 4-week closing timeline. First time acquisition (minus a much smaller one in the past that didn't require diligence). Current thinking is to perform financial diligence by ourselves (from finance background).

Main question is around what type of legal diligence to engage and how much to budget for that? Any other types of diligence I'm missing for this size of transaction? Thanks in advance!

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commentor profile
Reply by a searcher
from The University of Chicago in New York, NY, USA
^redacted‌ ^redacted‌ ^redacted‌ ^redacted‌ Great call-outs thank you. I completely forgot about technical diligence. It's a seemingly straight-forward piece of cloud software built by the owner himself a decade ago. Who would be equipped to do the technical diligence? Myself playing around with it? Or do I need to have a call with this contract developer he uses? Or some other 3rd party?
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Reply by a professional
from University of Notre Dame in New York, NY, USA
Hi ^redacted‌ - would be happy to connect. While this deal is a bit on the small side for me, my colleague specializes in sub $1M deals and offers an unbeatable fee structure (no retainer, no milestone payments and all fees payable at closing). Our firm has a ton of experience working with searchers and Independent sponsors. Shoot me a DM or email redacted and I'd be happy to make the intro.
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