I have heard horror stories about buyers wearing sellers down through grueling, months-long due diligence until the seller accepts a lower price just to end the pain. How do we prepare our operations on our exit runway to survive diligence fatigue?

Question

Tyler Smith · Accepted Answer

Diligence fatigue is a deliberate tactic used by some buyers to wear down your resolve and force a price reduction, known as re pricing, right before closing. The only way to survive this is to prepare your operations long before you sign a letter of intent.

You must build a virtual data room years in advance. Do not wait for the buyer to send their checklist. Start organizing your corporate records, customer contracts, employee files, intellectual property, and financial statements today.

Assign a dedicated project manager to oversee the due diligence process. This should not be you or your Integrator, as you both need to keep your focus on running the business and hitting your quarterly Rocks. If your operational performance dips during due diligence, the buyer will use it as an excuse to lower their offer.

Use your weekly Level 10 Meeting™ to track diligence progress as a major company priority. When a buyer requests a document, your goal should be to produce it within twenty four hours. When you respond with speed and precision, you signal to the buyer that your operations are highly organized, which removes their leverage to delay the transaction or discount your valuation.