QUESTION: Exits and deals: how to conduct due diligence and company valuation?

Conducting due diligence and an independent company valuation is a mandatory step before concluding any major investment deals or purchasing a business. This process requires maximum transparency and attention to detail from the seller. At the first stage of preparation for the audit, it is necessary to detail your ICP—your ideal customer, their key pain points, purchase triggers, and the expected result from using your product or service.

A clear understanding of the target audience and the proven market value of the product significantly increase the accuracy of marketing and sales, which is viewed positively by auditors. When a company can demonstrate stable demand and clear customer acquisition economics, it reduces risks for the investor. All data on customers, conversions, and the effectiveness of promotion channels must be documented and ready for inspection.

During due diligence, a deep analysis of financial reporting, the legal integrity of the business, the technology stack, and human resources is carried out. Investors carefully examine every aspect of the company's operations to identify hidden risks and potential growth points. Therefore, business owners are advised to conduct an internal audit long before starting negotiations with buyers.

A professional company valuation is built on comparing its financial metrics, growth rates, and market share with similar players in the industry. Well-prepared documentation and transparent business processes help avoid delays in the audit process and make it easier to justify a fair company valuation when closing a deal.