Diligence

Why CIMs die in diligence — and it is not the financials

March 2026

Most CIMs that fail in diligence do not fail because of the financials.

They fail because the financial story depends on conditions that cannot be independently verified — or that disappear when the founder steps back.

The adjustments hold up. The EBITDA bridge is clean. But the buyer's lender asks a different set of questions: Who makes pricing decisions without the owner? Who manages key accounts? Who resolves operational exceptions? Is there a documented process, or is the process the founder?

When the answers to those questions are "the owner handles it" — the file has structural fragility. Diligence finds it. Re-trades follow.

Financial normalization and structural governance are different disciplines. A CIM needs both.