How to Evaluate a Deal Pre-LOI (When All You Have is a CIM)

I run DueDilio, a platform where buyers connect with M&A service providers — and one of the biggest lessons I’ve picked up from watching hundreds of deals unfold is this: Start your diligence before the LOI. Most searchers at this stage only have access to a CIM, a short broker call, and maybe some high-level financials. That’s it. But even with limited info, I’ve seen buyers make better decisions by focusing on a few key areas... CUSTOMER CONCENTRATION What % of revenue comes from the top 5 customers? If 50% of revenue comes from two contracts or one industry vertical, that’s a flag. CIMs often highlight top accounts — read between the lines. OWNER DEPENDENCE What roles does the seller fill today? Which ones could be transitioned to staff or outsourced post-close? Does the CIM say the seller “wears many hats”? That usually means they’re involved in everything — which could make the transition harder. REVENUE & MARGIN TRENDS Is the business growing faster or slower than its industry? What explains any recent spikes or dips? You likely won’t have access to detailed statements yet — but high-level revenue and margin shifts over the last 3 years should be explained. ONE-TIME EVENTS OR RISKS Have there been legal issues, insurance claims, or supplier disputes in the last 3 years? Did the business benefit from a huge, one-time client order? Consider macro events too - like COVID or tariff-related impacts. Does the business have pricing power? GROWTH & RISK PROFILE Where does the seller or broker believe the business could grow? And what do they think the greatest risks are? SALES & MARKETING REALITY "Revenue fixes all problems" - but where does it come from?. Inbound? Outbound? PPC? Conferences? Referrals? You need to understand how the business actually captures clients and generates revenue. DEAL COMPLEXITY Is this an asset sale or stock sale? Are there multiple entities? Franchise or licensing agreements? Even at the listing stage, complexity is often visible. Pro Tip: At DueDilio, we’ve built a free Pre-LOI Questionnaire that helps buyers ask these exact questions in a focused way. You can download it here: https://www.duedilio.com/pre-loi-due-diligence-checklist/ If you need help pulling in experts for financial review, background checks, or legal screening, feel free to DM me. I run DueDilio, a free marketplace that connects buyers with vetted M&A service providers including attorneys, QofE vendors, and deal coaches. Question for the community: What do you look for during the pre-LOI stage when all you have is a CIM and some limited financials? Any red flags you’ve learned to spot early?