Big-4 and boutique pre-LOI work often runs $25K–$100K before you even sign. Get a first-pass public-info screen from $49 and save advisor hours for confirmatory work.
Run a Pre-LOI Screen — $49 See sample formatPre-LOI due diligence is the preliminary investigation a buyer conducts before issuing a Letter of Intent (LOI). Unlike the deep confirmatory diligence that comes after an LOI — with full data room access and third-party advisors — pre-LOI diligence is about answering one question: Is this target worth pursuing?
Think of it as the difference between a first date and a background check. You’re not verifying every line item yet. You’re checking for deal-killing issues, validating that the business is what the CIM (Confidentiality Information Memorandum) claims, and deciding whether to commit to exclusivity.
The pre-LOI phase is where the most value is created or destroyed in an acquisition. A thorough pre-LOI screen catches fatal flaws before you spend $100K+ on advisors, commit to a 90-day exclusivity period, or — worst case — discover the problem during confirmatory diligence after you’ve already mentally committed to the deal.
Deals that die post-LOI are expensive. You’ve already paid for:
Most importantly, a busted deal damages your reputation with brokers, sellers, and lenders. Do it twice and you start losing deal flow.
Use this checklist before committing to an LOI. Each item can be screened using public data, the CIM, and a management call — no data room required.
Get a comprehensive report covering financials, legal history, market position, risk signals, and deal-relevant intel — before you commit to exclusivity.
Order a Report — $49These are the issues that blow up deals in confirmatory diligence. Catch them now and walk away — or use them to negotiate a better price.
The CIM shows “growing” revenue, but a closer look reveals a revenue recognition policy change that pulled forward future revenue. Always compare TTM revenue under both old and new policies.
If one customer represents more than 30% of revenue, losing them post-close can be catastrophic. This is the #1 deal-killer in PE diligence. Check renewal rates, contract length, and whether the relationship is with the company or a specific salesperson.
Active lawsuits don’t always kill deals, but undisclosed ones do. Search PACER, state court records, and Google for the company + “lawsuit.” A company that hides litigation will hide other things too.
If the founder/CEO is the rainmaker, product visionary, and relationship holder — and there’s no #2 — you’re buying a job, not a business. Post-close retention risk is enormous.
If Q3 financials were prepared on a cash basis and Q4 on accrual, or if the company changed fiscal year-ends mid-stream, the numbers are being managed. Demand consistent, audited (or at least reviewed) financials.
One supplier providing 80%+ of a critical component with no qualified second source. A supply disruption post-close can wipe out a year of EBITDA.
Revenue spread across 20+ customers, with 70%+ recurring (subscriptions, contracts, service agreements). Low churn. This is what PE firms pay a premium for.
Few shareholders, all rolling equity post-close, no disgruntled minority owners. Management team staying for 3+ year earnout.
SOPs, an ERP system, documented customer onboarding. The business runs without the founder’s daily involvement.
Margins improving 2-3 years running, with a clear explanation (pricing power, efficiency gains, scale). Not just one-time cost cuts.
Here’s how a disciplined pre-LOI process unfolds — and where AI compresses the timeline.
Review CIM, management presentation, and any preliminary data. Decision: proceed or pass. With AI: Run a comprehensive report in under an hour covering all public data on the company.
Research financials, litigation, IP, regulatory filings, news, social media, employee reviews (Glassdoor), and competitive positioning. With AI: All of this is compiled automatically into a structured report with sources cited.
First call with management. Use this to validate findings, ask about gaps, and assess culture/chemistry. Come prepared with specific questions from your research.
Synthesize findings. Are there deal-killing issues? Is the valuation range supported by the data? What conditions should the LOI include?
Draft LOI with your legal team. Include valuation, structure, exclusivity period (60-90 days), and any conditions precedent discovered during pre-LOI screening.
Exclusivity period starts. Full data room access. Quality of earnings, legal DD, IT assessment, environmental (if applicable). This is where the real money gets spent.
| Factor | Traditional (Analyst/Consultant) | dodilligence AI Report |
|---|---|---|
| Timeline | 1–4 weeks per target | < 1 hour |
| Cost per target | $5,000–$25,000 | $49 |
| Sources checked | 10–20 (analyst-dependent) | 40+ (automated) |
| Consistency | Varies by analyst | Standardized every time |
| Screen multiple targets | Prohibitively expensive | Run 10 from $490 |
| Red flag detection | Subject to human error | Systematic, every report |
Get a 40+ source diligence report delivered in minutes. Financials, legal history, competitive position, risk signals — all before you sign the LOI.
Get a Report — $49 Full 47-Point Checklist →This guide is for informational purposes only and does not constitute legal, financial, or investment advice. Always consult qualified professionals before making acquisition decisions.
Public-info pack with financials, risk register, and IC workplan. Code DI20-WELCOME → $39.20. Not legal or financial advice.
Order $39.20 → See sample