Due diligence cost

searcher profile

July 14, 2020

by a searcher from BI Norwegian Business School in Laguna Niguel, CA, USA

Does anyone know how much private consultants in the US typically charge for a quick 1-month preliminary due diligence to get to signing of LOI stage? I.e., not full and final due diligence to close, just the initial info gathering and review, company valuation, setting up deal structure and LOI etc. Thanks!

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commentor profile
Reply by a searcher
from Massachusetts Institute of Technology in Miami Beach, FL, USA
Is there a reason why you need someone else to do preliminary DD prior to the LOI stage? Although I could be wrong, the LOI doesn't bind you to do anything. Unless you have a much more intense definition of preliminary DD, in my mind, it's the searcher's job.

Now, if you have some specific question that's critical to actually generating an LOI - say valuing inventory where the inventory value could be a big proportion of the proposed price - perhaps you might want to find a specialist who can do that one thing. But even then, I'd imagine that you've had free, casual conversations with experienced people or read something like Business Brokerage Press' Business Reference Guide to know which industry-specific things to check.

But perhaps, again because the LOI doesn't bind you, it may be a matter of preference whether you do "preliminary DD" prior to or after the LOI.
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Reply by a professional
from University of Texas at Austin in Houston, TX, USA
It shouldn't be terribly expensive. We charge a pretty modest fee ($750) to do Preliminary Vetting for most deals pre-LOI. Pricing for diligence post-LOI is of course very different.

We're big on pricing transparency so you're welcome to use our quote calculator to see what our prices look like (no need to input an email or anything like that to get pricing info): https://rapiddiligence.netlify.app/
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