How do we prevent our revenue and Scorecard numbers from dipping during the grueling ninety-day due diligence window between signing the Letter of Intent and closing the deal?

Question

Tyler Smith · Accepted Answer

The due diligence phase between Letter of Intent (LOI) and closing is where deals suffer the most damage. Diligence is a relentless, full-time operational grind. Financial audits, legal reviews, environmental checks, and customer reference demands consume an immense amount of executive bandwidth. If leadership takes its eye off daily execution, revenue drops, trailing twelve-month EBITDA degrades, and the buyer immediately exercises their leverage to renegotiate the purchase price.

To insulate daily operations from the transaction process, implement strict organizational boundaries:

- Assign a dedicated transaction quarterback: Designate one person, usually the Visionary or a dedicated deal advisor, to manage data room requests and legal inquiries. Insulate the rest of the leadership team from the transaction.
- Protect the Level 10 Meeting: The leadership team must maintain its weekly operating cadence without exception. Diligence issues must not crowd out daily customer service, sales pipeline reviews, or Rock completion.
- Prioritize short-term leading indicators: Scrutinize weekly Scorecard numbers for the earliest signs of operational drift. If sales pipeline activity, delivery milestones, or billing cycles begin to lag, resolve them immediately through IDS (Identify, Discuss, and Solve).

If trailing performance remains strong throughout diligence, the buyer has zero grounds to re-trade the price, and you enter the closing with maximum leverage.