The M&A Due Diligence Checklist Nobody Talks About.

Studies consistently show that 70-90% of acquisitions fail to create expected value. The most common culprit? Cultural mismatch.

Cultural due diligence isn't soft stuff—it's survival. How does the target company make decisions? How do they handle conflict? What behaviors are rewarded and punished?

Spend time in their office. Observe how people interact. Talk to departing employees. The culture that exists is often very different from the culture that's described.

Financial statements will show you revenue. They won't show you why that revenue exists.

Is the target's largest customer loyal to the company, or to a specific relationship with the founder? What happens to that revenue when the founder exits? Have you talked directly to the key customers about the transition?

Customer concentration risk is often the gap between what a company is worth on paper and what it's worth in practice. A business with 40% of revenue from one client isn't really a business—it's a dependency.

In tech-enabled businesses, the code base is an asset. But it can also be a liability that doesn't appear on any financial statement.

How old is the core technology? How much of the system is documented? What happens if the lead engineer leaves? These questions reveal operational fragility that can torpedo post-acquisition execution.

The same principle applies to processes. A company running on tribal knowledge and heroic individual effort will struggle to scale, regardless of what the growth projections say.

Before you close, you should have a detailed 100-day integration plan. If you can't write that plan, you don't understand the business well enough to buy it.

The plan should cover: Key personnel retention. System integration timelines. Customer communication strategy. Organizational structure decisions. Performance milestones.

If your integration plan is 'we'll figure it out after close,' you're not doing due diligence—you're gambling.