Issues uncovered in diligence that changed your view of the deal?

April 28, 2026

by an member from Case Western Reserve University in Cleveland, OH, USA

During QoE and diligence, what was one issue you uncovered that materially changed your view of the deal (positive or negative)? How early could you have identified it?

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Reply by a professional
from Technische Universität Berlin in Miami, FL, USA

Pattern that shows up consistently: the key-person dependency that's invisible in the financials. The operations manager who IS the scheduling system. The office admin who carries every customer's preferences in her head. The owner whose relationships are the only reason retention looks as good as it does. None of this shows up in a QoE report because it's operational risk, not financial risk. But it defines the first 100 days. Early signal: ask "what happens if [that person] is out for two weeks?" If the answer is a long pause - that's the risk. Could you have found it earlier? Almost always yes. But only if you're asking operational questions during diligence, not just financial ones.

Reply by a searcher
from DePaul University in Chicago, IL, USA

It's nice to see laundry lists of possible issues, but here are the specific issues that prevented me from moving forward, related to the LOIs that I mentioned a month ago: https://searchfunder.com/post/a-few-of-the-lessons-ive-learned-so-far LOI #1 (software product company): very poor code quality. LOI #2 (SaaS company): owner would not let me or third-party due diligence company review the code. LOI #3 (e-commerce company): recent ERP migration prevented access to financials more than 1 year in the past. LOI #4 (software consulting company): too many issues in financials, and I finally pulled the plug after learning that revenue was artificially inflated by portions of the company already sold in the past (at this point, I no longer knew what I was buying anymore because it took the seller too long to divulge all the skeletons). LOI #5 (business services company): seller misrepresentation of company fundamentals, which I didn't discover until shadowing their phone calls during my onsite visit.

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