Most founders believe their business is ready for a buyer's scrutiny. Many find out otherwise after they have signed a letter of intent, when the leverage has already shifted to the other side of the table. That tension was the subject of the panel I joined at TechExit.io Toronto on Oct. 15, "What Gets Exposed During Diligence?" Remy Orpen of Scotiabank moderated. Chris Dittrich of Fasken, Marc Gingras of Bloks and Chris Longley of MNP were on the panel with me. The organizers framed the session around one idea: diligence should not be the first time material issues come to light. It should be a process of verification, where buyers, lenders and their counsel confirm a story the founder has already told clearly. Here is what I took into the room, drawn from my preparation and from the cases in my book, "Selling Your Canadian Business." The examples are anonymized. The surprise costs more than the problem An Alberta software owner I call Amit had a revenue recognition difference in his financials. It was not improper, but it lowered earnings by about eight per cent. He did not raise it during marketing. The buyer found it, cut the offer by 15 per cent and demanded broader representations. The underlying issue was small. The surprise was expensive. Disclosing it early, with context and a proposed fix, would have protected the original offer. Answer with data, not emotion Buyers expect to find problems, and some use routine findings to test a seller's resolve. A Saskatchewan environmental services owner I call Marcus faced a request for a 12 per cent price cut three weeks into diligence. His team answered in writing, with data, in three days. The buyer withdrew the demand and accepted a small escrow and a customer consent instead. Speed matters here. Answering information requests within 48 to 72 hours keeps momentum. Silence looks like hiding something. Fix it before anyone looks Some gaps cannot be explained away. They have to be fixed before a process starts. • Intellectual property: A B.C. software owner I call Alan had developer contracts that did not assign IP, unregistered trademarks and contractors who should have been employees. The buyer cut $800,000. Alan walked away, spent four months fixing the problems and later sold for $1.2 million more than the original offer. • Key person risk: An Ontario analytics owner I call Priya was the main contact on her top accounts, and recurring revenue was 38 per cent of the total. Over 12 months she moved relationships to her managers, raised recurring revenue to 58 per cent and hired a chief operating officer. The multiple came in 40 per cent above the preliminary assessment. These are selected cases, and they show what is possible rather than what is typical. The pattern is the useful part: preparation is cheaper than repair under pressure. Settle the people terms early The session also covered founder roles, compensation and team retention. My view is that these terms belong on the table before you grant exclusivity, while buyers are still competing. Once exclusivity starts, anything left vague is rarely resolved in the seller's favour. If you plan to leave completely, avoid earnouts where you can. If one is unavoidable, insist on objective metrics, short measurement periods and protections that require the buyer to operate the business in a way that lets the earnout be achieved. For critical staff, use retention agreements or equity incentives. The legal drafting and the quality of earnings work are best handled by counsel and your CPA advisors. Founders should decide who does what long before diligence opens. The question to answer this week Diligence tests your preparation. It does not create it. If a buyer's team opened your records tomorrow, which finding would you want to have disclosed first? To see these cases in full, read "Selling Your Canadian Business" at redacted. Sources TechExit.io, "What Gets Exposed During Diligence?" session page, Oct. 15, 2026 TechExit.io, Karl Sigerist speaker page Sigerist, Karl E., Jr., "Selling Your Canadian Business" (case studies, anonymized) redacted