Preliminary Commercial Due Diligence

Market Analysis

Market Sizing and Growth: Assesses the size of the opportunity, growth rates, etc.
Market Structure, Dynamics and Trends: Analyses how the market is structured, the dynamics at play, and how trends are shaping the market.
Macro Trends and Key External Drivers: Evaluates external economic, regulatory, or technological factors that could impact the investment.

Competitive Landscape, USP and Value Proposition

Competitive Analysis: Identifies key competitors and analyses the company's competitive position.
USP: Tests the strength of the USP vis-a-vis the competition.
Value Proposition: Analyses the clear benefit of the product or service for the customer.

Strategic Risk, Growth and Forecast Validation

Risk Identification: Uncovers risks and "red flags" that could negatively impact the company's valuation or future operational success.
Growth Validation: Identifies value-creation levers, such as expansion into adjacent segments or new geographical markets.
Forecast Validation: Critiques the target company's business plan to ensure projected revenues and growth are realistically achievable.

Project examples of 'preliminary commercial due diligence'

Request: Test the growth hypothesis behind a proposed investment in a European B2B SaaS company ahead of a full commercial due diligence engagement.
Output: An analysis of the target's market, competitive position and USP, plus a critique of its revenue forecast against observed market growth rates.
Client impact: The client, a growth equity investor, used the analysis to negotiate a lower entry valuation before commissioning full due diligence, based on flagged risks in the original forecast.

Request: Evaluate the competitive position and risk profile of a target logistics company ahead of a proposed acquisition.
Output: A preliminary assessment covering the target's competitive landscape, key risks, and the credibility of its growth forecast.
Client impact: The client, an infrastructure fund, used the findings to justify commissioning a full commercial due diligence report from a specialised vendor, with a narrower scope focused on the flagged risk areas.