Does anyone have feedback on best practices for a self-funded searcher trying to be cost effective with their due diligence process? I have more than enough checklists of due diligence items, but what I'm trying to refine is the method in which I implement outside (and costly) partners like lawyers and CPAs.
General flow in my mind:
1. Do initial financial and legal due diligence myself through modeling on financial statements and internet research of public records. Identify any major red flags myself. (probably within 1 week of DD beginning)
2. Calls with seller regarding operational questions and review key items I've requested (customer list, sales records, etc) (probably within 1 week of DD beginning). Do an on-site visit with seller.
Sticking point - do you pay a lawyer to begin legal DD on your behalf before you pay a CPA to do a QoE/PoC? If no major red flags are raised through your own DD efforts, is it better to pay a CPA and lawyer congruently, or would doing one and then other be better? I know timeliness is a consideration here--I'm planning against a###-###-#### day DD period. I'm trying to avoid paying a CPA and lawyer at the same time to only have one identify a huge issue and be out of pocket for both.
I know being overly cheap with your DD process is not a good idea, but there has to be a good methodology out there.
Appreciate any feedback.
Due Diligence Priorities/Timeline
by a searcher from The University of North Carolina at Chapel Hill - Kenan-Flagler Business School
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