Evaluate every
business with
full confidence.
An interactive due diligence framework built from 50+ closed acquisitions across Africa. Complete checklists, red flag radar, and a weighted scoring calculator.
Chapters
DD overview
Due diligence is the systematic process of verifying every material claim a seller makes. It exists to surface problems before you're legally bound — not after.
When to do DD
Review data room, form initial view, identify major questions
Deep verification of all claims; legal, financial, technical
Final check that nothing material has changed since LOI
Priority key
Walk away if you can't verify these. Non-negotiable.
Gaps here warrant price adjustment or renegotiation.
Valuable context, but not a dealbreaker if missing.
Buyer Members get AI-assisted DD tools that auto-generate questions specific to the business category and flag anomalies in real-time.
Interactive DD checklists
Click each item to mark it complete. Filter by priority. Your progress is saved in your session.
Financial Due Diligence
Financial DD is the foundation of any acquisition. Revenue claims must be reconcilable line-by-line to bank statements. Every add-back must be documented and defensible.
Reconcile revenue in P&L to bank deposit records for 24+ months
Obtain direct read-only access to payment processor (Stripe, Paystack, Flutterwave)
Verify all stated revenue is cash-collected (not accrual or deferred)
Review monthly MRR/ARR cohort data for 18+ months
Audit all owner add-backs — each must have documentation
Identify all business expenses not reflected in stated P&L
Check for deferred revenue obligations (subscriptions paid but not delivered)
Verify outstanding accounts receivable are collectable
Confirm all tax filings are current — request last 2 years of tax returns
Review all outstanding liabilities: loans, credit lines, vendor payables
Confirm no pending VAT, PAYE, or other government obligations
Review gross margin trends — identify any margin compression
Verify COGS and operating expense breakdown
Model 3 revenue scenarios (bear, base, bull) for next 24 months
Understand working capital requirements post-acquisition
Red flag radar
These patterns appear repeatedly in failed acquisitions. Know them before you enter a deal.
Walk away unless they can fully explain and document every discrepancy.
Any seller who will only provide screenshots has something to hide. Non-negotiable.
You inherit all liabilities at close. Unknown lawsuits become your problem immediately.
If the core product's code was written by a contractor without IP assignment, the business may own nothing.
Loss of that customer destroys the business. The risk is existential, not just a discount.
Ask for a detailed explanation. Structural declines (algorithm change, competitor) are harder to recover from than temporary ones.
Customers follow people, not businesses. If the seller leaves, do they leave too?
One policy change from Amazon, Google, or Meta can eliminate the business overnight.
Significantly increases transition risk and post-close operational stress. Price this risk in.
You're buying a leaky bucket. Every new customer barely replaces the last one.
Check product changelogs, app store announcements, and platform API notices.
Sellers often time listings at peak revenue. Verify that the growth is sustainable and not seasonal.
Legitimate add-backs exist, but large discretionary owner expenses should be scrutinised.
Factor in the true cost of bringing the tech stack current. This is working capital, not just capex.
Verbal agreements aren't assignable. Negotiate getting them in writing as a close condition.
Model the cost of replacement. Can you operate without this person, or do you need to retain them?
Scoring framework
Use this weighted calculator after completing your DD. The score provides an objective basis for your offer price and negotiation stance.
DD Score Calculator
0/4 areas ratedRate each area based on your findings. The weighted score gives you an objective quality assessment to guide your offer price and terms.
Weighted DD Score
From buyers who used this framework
DD that protected their acquisition
"The DD checklist saved me from a $380K mistake. Revenue reconciliation revealed the seller had been including a one-time grant in "recurring revenue" for 18 months."
Kwame Asante
Acquirer · Ghana
"I found a change-of-control clause in the top client contract that would have let them exit immediately after close. We renegotiated it before signing the SPA."
Priya Naidoo
Serial buyer · South Africa
"The scoring framework helped me compare three businesses simultaneously and choose the one with the strongest fundamentals. Closed in 28 days."
Emeka Diallo
First-time acquirer · Nigeria
FAQ
DD questions answered
For deals under $100K: 1–2 weeks. For $100K–$500K deals: 2–4 weeks. For deals over $500K: 4–8 weeks. Never rush DD to please a seller. A motivated seller who is applying pressure to close "before another buyer appears" is a seller who doesn't want you looking too closely.
For deals under $100K, a thorough self-directed DD using this checklist is sufficient. For deals $100K–$300K, consider a freelance accountant to verify financial claims ($500–$2K cost). For deals above $300K, engage a professional with acquisition experience — the cost is small relative to the deal size.
A seller who refuses to answer a reasonable DD question is a red flag. Note every refusal. If it's a minor question, document and move on. If it's a critical financial or legal question, consider it a deal-breaker unless they provide a satisfactory alternative.
LOIs are non-binding in most structures used on Africa Acquisition. If you discover a material misrepresentation or a genuine deal-breaker during DD, you can withdraw without financial penalty. However, read your specific LOI carefully — some include "break fees" for walking away without cause.
Trusting screenshots instead of requesting direct system access. Sellers can manipulate screenshots of analytics, Stripe dashboards, and P&L statements in minutes. Always require read-only admin access to primary systems as a condition of proceeding past the NDA stage.
Now you know how to
evaluate any deal.
Browse verified listings. Sign NDAs. Run your DD. Close with confidence.
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