Pre-LOI due diligence (data request list)

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April 30, 2026

by a searcher from Georgetown University in London, UK

BLUF: anyone have a data request checklist they fall back to pre- and post-LOI? Something I'm butting up against for the direct owner outreach I'm doing is data request fatigue from owners. For instance if they are using cash based accounting but I want to be able to do cash and accrual based reconciliations to make an educated valuation. If they don't have a broker helping them shepherd through the process and haven't done a deal before, it is genuinely a lot of work to get these docs. I'm very cognizant of not wanting to overwhelm them with requests but there are key things that I need to get a proper valuation done. Long winded way of saying, anyone have advice on what to ask for pre- and post-LOI and navigating the sensitivity that comes with not wanting to overwhelm an owner?
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Reply by a searcher
from London Business School in Sevenoaks, UK
I think you have taken a wrong turn here. If you’re buying at a size range where companies are cash accounting you have to get comfortable working with what they can produce. I would see as it as on you to produce accrual accounting pro forma’s as in any case anything sell side produces will be woefully inadequate and you’ll end up doing it yourself. A simple workshop / interview going through key revenue recognition, cost recognition points and any off balance sheet liabilities should get you what you need to do it yourself. In the end you may need to think about it as getting comfortable with the revenue profile and then applying what you see as structural margins in the industry plus or minus specific issues you see on the ground with the target. In the end though this is the ball game with smaller businesses and why they trade at the multiples they trade at. You can’t try to DCF your way to a good diligence process in this space and if you can’t get comfortable with the chaos you should look at bigger better organised businesses…
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Reply by a searcher
from Georgetown University in London, UK
@redacted‌ any help tagging folks would be great! I'm talking US here mostly. Also if there are old threads that cover this, don't mean to re-invent the wheel. Thank you!
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