Aligning Buyer and Seller Functional Leaders in Due Diligence

Q: “What if the buyer and seller functional leaders do not match? How do you coordinate the two sides?”

We take a functional approach to due diligence where we encourage your leaders from sales, marketing, finance, operations and other functional areas to meet with their respective leaders on the seller’s side. A functional approach ensures all important aspects are covered and explored during due diligence.

Due Diligence Buyer and Seller Interaction

Functional due diligence: Functional leaders from the buyer meet one-on-one with functional leaders from the seller during due diligence.

However, we often run into a situation where there are more functional leaders on the buyer’s side than on the seller’s because traditionally buyers tend to be larger than sellers. While you still want functional leaders from each side to meet, keep in mind you don’t want to overwhelm or intimidate the seller. I don’t mean take a soft or easy approach, but don’t have two or three of your functional leaders meeting with one leader from the seller’s side. It will feel like an ambush.

Identify which leader from your organization most closely aligns with their functional leader and pair them off one-on-one.  For example, while you may have accounting, HR and tax professionals, select only one of these leaders to meet with the individual performing all of these functions at the seller’s business. This approach will allow for effective communication between buyer and seller.

This question comes from our webinar “A New Thinking on Due Diligence.” Learn more about Capstone’s webinar series.