Commercial due diligence

Checking whether a company's market and its claims about customers hold up, before you invest in it or buy it.

What gets tested

A deal team rarely has long. The work goes first to whatever the price depends on most.

Market size: How big the market is, worked out from the number of customers and what they pay.
Competitors: Who else sells to the same customers, and how the company compares with them on product and price.
Customers: How concentrated the revenue is, and why the customers who left chose to leave.
The growth plan: The plan's figures, tested against what the market and the company's own history can support.
Pricing: What competitors charge, and whether the company could charge more.
Online traffic: Where the company's web traffic comes from, and how much of it rests on a handful of Google rankings.
Risks: Regulation, new entrants and anything else that could change the picture after closing.

Search traffic is easy to miss

Many companies win a large share of their customers through Google. A data room seldom shows how much of that traffic depends on a few rankings, or how fast it could fall after a site migration or a change to Google's results.

Amos has grown and protected search traffic for companies including OurCrowd, where non-branded search traffic grew 300 times in two years. He reads a target's traffic the way its next competitor would.

How to start

The brief

Send the name of the company and the date you need answers by. Add the questions your investment committee is likely to ask.

Confidentiality

Deal details stay private. An NDA can be signed before you send anything sensitive.

Who does the work

Amos Weiskopf founded Tevelis. He has worked with venture investment firms including OurCrowd and Rocket Youth, and he can check a company's software and data as well as its market.

Questions buyers ask

What is commercial due diligence?

An outside check of a company's market and competitive position before an investment or acquisition. It is used to judge whether the company's forecasts are believable.

How is it different from financial due diligence?

Financial due diligence is about the accounts and the quality of earnings. Commercial due diligence is about whether the market will support the revenue the plan expects.

Who uses commercial due diligence?

Private equity firms, venture investors, corporate buyers and lenders, usually before they sign.

How long does it take?

It is fitted to the deal's timetable, which is agreed in the brief.

What does it cost?

That depends on the questions and the deadline. The price is agreed once the brief is in.

Can it cover a company's online traffic?

Yes. For a business that wins customers online, Tevelis checks where its traffic comes from and how much of it is at risk.

Engagements by written brief.

Work begins from a documented problem statement, not a sales call.

Write a brief Or book a meeting