2025-07-22

How Investors Use Due Diligence to Negotiate

How Investors Use Due Diligence to Negotiate

 

Title: The Price Is After Diligence

Here’s how investors use DD:

  • Justify discounts
  • Add deal warranties
  • Adjust payment terms

A deal is never done until diligence is.

 “We like the business, but after diligence, we need to revisit the valuation...”
Sound familiar?

That’s because due diligence isn’t just verification -
It’s a negotiation tool.

 Here’s How Investors Use Due Diligence to Reshape the Deal:

1 Justify Discounts
– Revenue not recognized correctly?
– Customer churn higher than expected?
– Unclear IP or compliance gaps?
 Each red flag becomes a lever to push the price down.

2 Add Warranties & Indemnities
– Unpaid taxes? Pending litigations?
– Founders may be asked to personally warrant or indemnify against specific risks.

3 Adjust Payment Terms
– Issues with revenue certainty?
– Investors may split payments into tranches or add earn-outs based on future performance

 

Due diligence isn’t just about what’s found -
It’s about how what’s found is used to reshape terms, timelines, and trust.

Many founders think the deal is done at the term sheet.
But investors know:
 “The real deal starts after diligence begins.”

 

 The smarter your prep, the stronger your position.
Be diligence-ready - not discount-ready.

StartupTips #DueDiligence #InvestorReadiness #StartupFounders #Fundraising #Valuation #Governance #FinancialClarity #DueDiligenceSeries #valuationexpert #dealadvisory #ValueEdge #investments #mergersandacquisitions #privateequity #aifinvestments #mutualfundhouse  #legalduediligence #compliancecheck #riskmanagement #dealmakers #FounderTips

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Frequently Asked Questions

We provide professional valuation services across the following asset classes:
  • Land & Building (Residential, Commercial, Industrial, Agricultural)
  • Plant & Machinery (Manufacturing units, industrial assets)
  • Securities or Financial Assets (Equity shares, debentures, startups, AIFs)
  • Specialized Valuations for M&A, financial reporting, IBC, income tax, and more

Yes, our reports are fully compliant with applicable laws including:
  • Companies Act, 2013
  • SEBI Regulations (SAST, ICDR, AIF)
  • IBC, 2016
  • Income Tax Act, 1961
  • Valuation Standards by ICAI, IBBI, and IVSC

Absolutely. We have IBBI-Registered Valuers under all three categories—Land & Building, Plant & Machinery, and Securities/Financial Assets. Our team also includes experienced chartered accountants and engineers.

We serve a wide range of clients including:
  • Companies & Startups
  • CA & Law Firms
  • Banks & NBFCs
  • Government Departments
  • Individuals & HUFs

Our process is simple and efficient:
  1. Initial consultation to understand the requirement
  2. Document collection and site visit (if needed)
  3. Data analysis and valuation calculation
  4. Final report delivery, certified by a Registered Valuer

Key documents generally include:
  • Ownership/title documents
  • Asset photos or plant list
  • Latest financials
  • Company PAN, GST, or registration
  • Cap tables or investment details (for startups)

Turnaround time:
  • Land/Building or Plant & Machinery: 3–7 working days
  • Financial Assets / Startups: 1–7 working days
  • Fast-track services available on request.

Valuation may be required for:
  • Startup fundraising & ESOPs
  • Business transfers or buyouts
  • Regulatory compliance (SEBI, IBC, Income Tax)
  • Bank loans or mortgages
  • Fair value financial reporting
  • Mergers & Acquisitions

Yes, we specialize in:
  • 409A compliant valuations
  • DCF, NAV, and Berkus method-based startup valuations
  • ESOP pricing & compliance support

Our fees are competitive and project-specific, based on:
  • Nature and size of asset
  • Complexity of engagement
  • Regulatory requirements
  • Contact us for a personalized quote.

Our detailed reports feature:
  • Valuation method and justification
  • Market research & data
  • Key assumptions and disclaimers
  • Final value conclusion
  • Certificate by the Registered Valuer

Yes. We offer remote/desk-based valuation for startups, financial assets, and select use-cases. For physical assets, we usually require on-site verification.

Yes. We offer:
  • Monthly/quarterly retainer packages
  • Bulk valuation pricing for CA firms, legal advisors, banks, and corporates

Yes. Client confidentiality is paramount. All data shared is stored securely and not disclosed to any third party without your consent.

You can get started by:
  • Filling out our Contact Form
  • Calling us directly
  • Scheduling a free consultation