This is a YouTube video titled "Due Diligence - MicroAcquire - Startup Acquisition Marketplace" containing a detailed monologue or presentation about the due diligence process in startup acquisitions. The speaker explains the importance, challenges, and typical questions involved in due diligence, emphasizing transparency and the value of advisory support. The content is educational and aimed at entrepreneurs preparing for acquisitions. The transcript features a single speaker and does not include Andrew Gazdecki.
I've been through due diligence two times. It's very time consuming, it's stressful, but it's a critical part to acquisitions. What is due diligence? Diligence is convincing the buyer your startup is as good as you say it is. So like buying a used car, they'll take it for a test drive, they'll ask a bunch of questions and sometimes find ways to haggle down the price. So this is something that is definitely fairly common in acquisitions. And if this happens, this is where red flags start coming up with the buyer. If, if they move into due diligence and they say, hey, I found one thing and it's not material, I'd probably have a talk with the buyer and say, I don't think that's fair and that can really be the first. I'd say it's a yellow flag. But if they start doing that over and over and they get deeper and due diligence and they keep finding stuff, then they're probably not someone you want to work with. They're really going to be reviewing the business health and performance. Are profits increasing or decreasing by how much? These are typical questions. Again, not going to go through all of it. But this document is available. But the high level takeaway from, from here is due diligence is lengthy. And so by going through it personally as an entrepreneur, it's stressful. It really is like you're in due diligence. You want to present your business in the best possible light. The buyer will sometimes ask questions that may seem really obvious to you. I always say just take an unemotional approach where these questions may seem ridiculous, but as a buyer, like you just don't know everything and it's your job to, you know, how does sales work? How does marketing work? Can you share with me all of your legal documents that I should know about? Do you have any large customer contracts? Can I meet with your team? Potentially. There's so many different aspects, but my main point I'm trying to get across is go through it with excitement and understand that there are going to be questions that may seem tedious and time consuming and pointless, but really, again, your job is to de risk the acquisition for the buyer. And the more that you're open and transparent and helpful, the better. So definitely try and just basically go through this. But I recommend hiring M and A advisory help. Having someone in your corner that's been through this before can be really, really crucial. As you enter due diligence and every hour that you're spending on this. You're potentially getting paid quite a bit, so, you know, keep pushing forward. You just don't know everything and it's your job to, you know, how does sales work? How does marketing work? Can you share with me all of your legal documents that I should know about? Do you have any large customer contracts? Can I meet with your team? Potentially, there's so many different aspects, but my main point I'm trying to get across is go through it with excitement and understand that there are going to be.
