Preparing for due diligence with data

Starting due diligence for your next funding round or for an exit? You’ll need the data at your fingertips. Data in many forms and from many sources, both internal and external. Like a clear and accurate view of your customer journeys, acquisition costs and lifetime value. Or data-driven insight into your addressable market and related opportunities. Whatever the question, a demonstrable ability to exploit data is a powerful signal to investors.

My role in several high profile exits means I speak from personal experience. I held senior data positions at Just Eat, momondo Group and Trainline, constructing infrastructure with a clear focus on an exit event.

The run-up to an exit is a fraught and frantic time for everyone. The questions come in thick and fast, with very little time to turn answers around. Staying on top of that workload is an enormous challenge, with long days and sleepless nights an inevitability. It’s much worse if necessary internal systems and processes are not in place.

More than once, I had to burn the midnight oil in order to re-extract, clean, combine, transform and publish data for a last minute query. There’s nothing quite like a potential billion dollar public trade to focus the mind!

Some due diligence requests can seem unreasonable. But the expectation of data access, transparency and legibility is not only reasonable – it’s often a legal obligation.

Laying the foundation

The importance of data for due diligence can’t be overstated. However, accessible, legible, structured data comes from a well-built data strategy and programme. Get that right and building a well-organised Virtual Data Room becomes simple.

Here are six items you’ll definitely need:

1. The company legal structure
2. Financial statements – the data story starts here
3. Management reporting, with a deep dive into:
   – Your revenue generation
   – Your costs
   – The resulting P&L
   – Market penetration
   – The opportunities that lie ahead
   – The strategy you’re using to address them
4. A single customer view (anonymised, of course)
5. Your digital marketing attribution strategy and model
6. A clear picture of your CAC:LTV and its movement over time

Get this stuff right now and you’ll find yourself always ready for the next funding round. Even more importantly, you’ll profit from data-driven decision making every day.

Don’t underestimate the value investors place on seeing that your company is clearly on top of the data. It speaks volumes.

Learning from experience

Irrespective of how you intend or need to use your data, the solution is the same.

• Break down data silos
• Centralise data from all sources in a data lake
• Layer up your logic – transparent, quick and simple
• Connect your reporting and analysis directly to that single source of truth

Do it once, do it well, automate it from end to end.

My experiences of tackling these challenges motivated us to build kleene.ai. Hiring teams and solving the issues from the ground up gave way to new inspiration. We needed to find a better, quicker and vastly more cost-effective solution.

The kleene platform takes away the engineering complexity and offers complete autonomy to your analysts. Fully automated and lightning fast, it offers 10x the speed to insight and value.

We’ve been through the data for due diligence process over and over again. Need a helping hand? We can guide you through this from start to finish. Please get in touch.

The stakes will rarely be higher, the cost of failure more dramatic or the prize sweeter.