From Assumption to Evidence: A Smarter Commercial Due Diligence Checklist

Don’t Buy the Story. Validate the Market.

A Commercial Due Diligence Framework That Actually Reduces Risk

Every deal looks good in a pitch deck.

Growth curves rise smoothly. Markets are “large and expanding.” Differentiation is “clear.” Customers are “sticky.” Pipeline is “strong.”

Commercial due diligence exists for one reason: to test whether any of that survives scrutiny.

A robust CDD process does not confirm the narrative. It pressure-tests it. Below are the core elements that separate surface-level analysis from real commercial validation.

1. Market Sizing and Positioning

Is the market really as attractive as claimed?

A credible CDD must move beyond syndicated headlines and management slides. It requires bottom-up modelling, segment definition, and triangulation with industry sources.

How large is the true addressable market?
Is growth structural or cyclical?
Is the target outperforming the market — or simply riding it?

Most importantly: if growth slows, does the investment case still hold?

Market context is not background information. It is the foundation of the deal.

2. Value Proposition and Differentiation

Why does this company actually win?

Every target claims differentiation. Fewer can demonstrate defensible advantage.

CDD must examine whether the company’s unique selling points are real, replicable, and valued by customers. Is the edge based on technology, economics, brand, switching costs, network effects — or simply relationships and short-term pricing?

If competitors can replicate the offer within 12–24 months, the multiple should reflect that reality.

3. Competitive Landscape and Benchmarking

How exposed is the target?

Understanding the competitive environment is not about listing names. It is about assessing threat intensity.

Who holds pricing power?
Who has superior distribution?
Where are margins under pressure?
What new entrants or regulatory shifts could change the game?

Benchmarking reveals whether the target is structurally advantaged — or operating in a temporarily favourable window.

4. Channel and Route-to-Market Validation

How durable is revenue?

Revenue quality depends on distribution strength. CDD must examine how the company reaches customers, how dependent it is on key partners, and whether margins survive channel incentives and competitive friction.

Is the go-to-market model scalable?
Are relationships contractual or relationship-driven?
Is concentration risk understated?

Channel validation often reveals vulnerabilities hidden behind topline growth.

5. Customer Analysis and Decision Process

Why do customers buy — and why might they stop?

Customer validation is where commercial narratives are either confirmed or exposed.

Who controls the budget?
What triggers purchasing decisions?
How long are sales cycles in practice?
What would cause a switch?

Understanding procurement reality, renewal behaviour, and switching barriers is essential to assessing revenue durability.

Bringing It Together

Effective commercial due diligence is not a checklist exercise. It is an integrated assessment of market structure, competitive strength, route-to-market durability, and customer behaviour.

The goal is simple: replace assumption with evidence.

How Outman Supports Commercial Due Diligence

Outman supports M&A processes with a structured, evidence-based approach tailored to each transaction. As a boutique consultancy, we adapt the scope to your specific investment thesis rather than applying a fixed template.

We combine bottom-up market sizing, competitor benchmarking, channel validation, and customer analysis into a coherent commercial view. Our team manages primary research end to end — from hypothesis definition and recruitment of hard-to-reach industry participants to conducting interviews, handling honoraria, and delivering clear, decision-ready outputs.

Expert interviews are a powerful enabler across the entire framework. They pressure-test management claims, validate competitive positioning, clarify route-to-market realities, and reveal how buying decisions are actually made.

Because in M&A, the cost of being wrong is far greater than the cost of asking harder questions.