105 due diligence questions to help you maximize your exit value

April 25, 2026

Due diligence is the stage where a buyer assesses every detail to confirm your company’s worth. Thorough preparation can accelerate the process and significantly boost your exit valuation.

I’ve compiled 105 due diligence questions organized into seven key categories. These aren’t exhaustive, but they’ll help you anticipate buyer inquiries and craft responses that enhance your startup’s value. Use this guide to highlight strengths, address weaknesses, and position your company as a prime acquisition target.

Jump to a section:

• Financial performance
• Revenue and customer metrics
• Operational efficiency
• Legal and compliance
• Intellectual property
• Team and culture
• Market position and growth potential

Financial performance

1. What is your annual revenue for the past 3 years? - Present audited financials showing consistent growth; explain any anomalies to build credibility.
2. What is your revenue growth rate year-over-year? - Emphasize sustainable growth rates and outline plans to accelerate if growth has slowed.
3. What is your gross profit margin? - Highlight high or improving margins to demonstrate scalability and efficiency.
4. What is your EBITDA margin? - Showcase positive or growing EBITDA; justify negatives with strategic investments.
5. What is your net profit margin? - Display profitability or a clear path to it to reassure buyers of financial health.
6. What are your major expense categories? - Frame expenses as growth investments, like R&D or marketing, to justify costs.
7. How much debt does the company have? - Minimize debt where possible; explain high leverage as strategic and manageable.
8. What is your cash flow from operations? - Positive operational cash flow signals a healthy, self-sustaining business.
9. Are there any significant one-time revenues or expenses? - Exclude one-offs to reveal true recurring performance and stability.
10. What is your revenue recognition policy? - Use conservative, compliant policies to ensure revenue credibility.
11. Do you have audited financial statements? - Audited statements enhance trust; have them ready for review.
12. What is your working capital requirement? - Show efficient management to prove operational liquidity.
13. What is your capital expenditure history? - Align capex with growth initiatives to justify spending.
14. Are there any off-balance sheet liabilities? - Disclose hidden liabilities to avoid surprises that could lower value.
15. What is your tax compliance status? - Confirm all taxes are paid and filings current to eliminate risks.

Revenue and customer metrics

1. What is your total number of customers? - Highlight a growing, diverse customer base to show market traction.
2. What is your customer acquisition cost (CAC)? - Keep CAC low relative to LTV to prove efficient growth strategies.
3. What is your customer lifetime value (LTV)? - High LTV reflects strong value delivery and customer loyalty.
4. What is your churn rate? - Low churn signals satisfaction; detail retention efforts to reinforce this.
5. What is your average revenue per user (ARPU)? - Rising ARPU indicates successful upselling or pricing power.
6. Do you have recurring revenue streams? - Recurring revenue is a valuation booster; quantify its percentage.
7. What is your sales cycle length? - Shorter cycles suggest efficiency and scalability in sales.
8. Who are your top 10 customers by revenue? - Diversified top customers reduce concentration risk for buyers.
9. What percentage of revenue comes from your top customer? - Keep this below 10–15% to minimize dependency concerns.
10. What is your customer satisfaction score (e.g., NPS)? - High scores predict retention and growth; share metrics if strong.
11. What is your customer retention rate? - High retention strengthens recurring revenue and stability.
12. How do you measure customer engagement? - Prove engagement with metrics like usage frequency to show stickiness.
13. What is your market share in your primary market? - Larger share signals dominance and competitive strength.
14. What is your pricing strategy? - Demonstrate pricing power or elasticity to justify revenue potential.
15. Are there any customer contracts with termination clauses? - Favorable terms protect revenue; renegotiate risky clauses.

Operational efficiency

1. What is your employee headcount? - Show a lean team or justify scaling with growth needs.
2. What is your revenue per employee? - High ratios indicate productivity and operational leverage.
3. What are your key operational metrics? - Align metrics with industry benchmarks to prove efficiency.
4. How do you manage inventory (if applicable)? - Efficient turnover reduces costs and boosts cash flow.
5. What is your supply chain strategy? - A resilient supply chain minimizes operational risks.
6. Are there any operational bottlenecks? - Identify and mitigate bottlenecks to show proactive management.
7. What technology stack do you use? - Modern, scalable tech enhances long-term value.
8. How do you ensure quality control? - Robust QA processes reassure buyers of product reliability.
9. What is your disaster recovery plan? - Preparedness for crises protects business continuity.
10. How do you handle customer support? - Efficient support boosts satisfaction and retention.
11. What is your IT security posture? - Strong security safeguards data and reputation.
12. Are there any pending capital investments? - Justify investments as drivers of future growth.
13. What is your office lease situation? - Favorable terms reduce overhead and liabilities.
14. How do you manage remote work (if applicable)? - Effective remote policies reflect adaptability.
15. What is your environmental, social, and governance (ESG) strategy? - ESG compliance can appeal to socially conscious buyers.

Legal and compliance

1. Are there any ongoing or pending lawsuits? - Resolve or disclose litigation to avoid valuation hits.
2. Do you have all necessary licenses and permits? - Full compliance eliminates regulatory red flags.
3. Are there any regulatory risks in your industry? - Mitigate or disclose exposure to regulatory changes.
4. What is your data privacy policy? - GDPR, CCPA compliance is critical for trust and legality.
5. Are there any employment law issues? - Resolve labor disputes to reduce legal risks.
6. Do you have proper insurance coverage? - Adequate insurance lowers liability exposure.
7. Are all contracts with customers and suppliers in order? - Favorable terms safeguard revenue and costs.
8. What is your corporate governance structure? - Transparent governance builds buyer confidence.
9. Are there any environmental liabilities? - Disclose and address environmental risks.
10. What is your history with tax authorities? - A clean tax record avoids surprises.
11. Are there any shareholder disputes? - Resolve internal conflicts to present a united front.
12. Do you have a compliance officer or team? - Dedicated compliance signals diligence.
13. What is your policy on anti-bribery and corruption? - Strong policies reduce legal and ethical risks.
14. Are there any product liability issues? - Mitigate product-related risks to protect value.
15. What is your export control compliance (if applicable)? - Compliance with international laws avoids penalties.

Intellectual property

1. What patents do you hold? - Patents protect competitive edges; list key ones.
2. What trademarks and copyrights do you have? - Strong branding and content protection add value.
3. Are there any IP disputes or infringements? - Resolve or disclose conflicts to clear risks.
4. How do you protect your trade secrets? - Robust protection preserves proprietary advantages.
5. What is your R&D pipeline? - An active pipeline signals innovation and growth.
6. Do you license any third-party IP? - Ensure licenses are transferable to the buyer.
7. What is your IP strategy? - Align IP with business goals to maximize worth.
8. Are your employees bound by non-disclosure agreements? - NDAs protect confidential information.
9. Do you have freedom to operate in your market? - No IP barriers ensure unhindered growth.
10. What is the valuation of your IP assets? - Quantify IP value to boost overall valuation.
11. How do you monitor for IP infringements? - Proactive monitoring shows diligence.
12. Are there any open-source software risks? - Mitigate licensing risks from open-source use.
13. What is your policy on employee inventions? - Clear ownership policies avoid disputes.
14. Do you have any design patents? - Protect unique designs to strengthen IP portfolio.
15. How do you leverage IP for competitive advantage? - Show strategic use of IP to differentiate.

Team and culture

1. What is your organizational structure? - A clear structure proves scalability and clarity.
2. Who are your key employees? - Highlight talent and succession plans to reduce risk.
3. What is your employee retention rate? - Low turnover signals stability and satisfaction.
4. What is your company culture? - A positive culture attracts buyers and retains talent.
5. Are there any key person risks? - Mitigate dependence on individuals with backups.
6. What is your employee compensation structure? - Competitive pay keeps talent and aligns interests.
7. Do you have stock option plans? - Equity incentives align employees with growth.
8. What is your training and development program? - Investment in talent shows long-term vision.
9. Are there any labor union issues? - Resolve labor relations to avoid disruptions.
10. What is your diversity and inclusion policy? - DEI initiatives can enhance appeal.
11. How do you measure employee satisfaction? - High satisfaction reduces turnover risks.
12. What is your remote work policy? - Flexible policies reflect modern adaptability.
13. Are there any pending HR issues? - Resolve HR matters before the sale process.
14. What is your leadership style? - Effective leadership inspires confidence.
15. How do you handle performance reviews? - Structured reviews drive performance and accountability.

Market position and growth potential

1. What is your market share? - A larger share suggests dominance and stability.
2. Who are your main competitors? - Highlight competitive advantages over rivals.
3. What is your unique value proposition? - Clear differentiation justifies premium valuation.
4. What are your growth projections? - Offer realistic yet ambitious forecasts.
5. What is your go-to-market strategy? - An efficient GTM plan reduces scaling risks.
6. Are there any untapped markets? - Untapped markets signal expansion potential.
7. What is your product roadmap? - Future products indicate ongoing growth.
8. How do you acquire new customers? - Scalable acquisition channels boost value.
9. What partnerships do you have? - Strategic partnerships enhance credibility and reach.
10. What is your brand reputation? - Strong brand equity adds intangible value.
11. Are there any industry trends favoring your business? - Align with trends to show future relevance.
12. What is your pricing power? - Ability to raise prices reflects market strength.
13. Do you have any exclusive agreements? - Exclusivity creates competitive moats.
14. What is your customer feedback loop? - Customer-driven innovation ensures relevance.
15. How do you measure market demand? - Data-driven demand analysis supports growth claims.

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