Today’s deal environment juggles shifting market variables and an ever-expanding information universe. With deal complexity intensifying and competition for quality assets heating up, the cost of a missed red flag or missed opportunity has never been higher. While due diligence has always been the foundation of every successful deal, having a streamlined and vetted process in place is what separates confident capital deployment from costly mistakes. More than ever, you need the right intelligence and tools to ensure no critical piece of information falls through the cracks.
Below, we outline the most relevant qualitative and quantitative criteria to cover on your due diligence checklist. Well-rounded, comprehensive research minimizes informational blind spots and helps identify red flags and potential risks — giving you a competitive advantage and the confidence to move with conviction.
Due Diligence Checklist: 8 Essential Components
Financial Due Diligence
Components central to this category include: audited and unaudited financial statements for a particular look-back period (typically 3 and/or 5 years) to evaluate the performance, condition, and financial health of the firm. These reports also indicate cash flow, assets, liabilities, financing secured, and increasing or decreasing profitability.
Financial due diligence involves gathering historical information such as:
- Outstanding debt
- Unrecorded liabilities
- Collateral for debt
- Schedule of depreciation and amortization methods over the past five years
- Analysis of gross margins and of fixed and variable expenses
- List of the company’s internal control procedures, assets, and liabilities
- Schedule of inventory, projections, capital budgets, and strategic plans
- General ledger, analyst reports, and breakdown of sales and gross profits by geography, channel, and product type
- Planned projection vs. actual sales chart
- Capital structure
Operational Due Diligence
Operational facets important to review include:
- Agreements and relationships with any subsidiaries, partnerships, or joint ventures
- Copies of contracts between the company and directors, officers, affiliates, and minimum 5% shareholders
- Loan agreements including promissory notes, financing details, and lines of credit
- All nondisclosure and noncompete agreements
- List of quotes, invoices, purchases, and warranty forms
- Options and stock purchase agreements affecting company operations
- Off-balance sheet liabilities
- Explanation of supply chain and supply restrictions
- Power of attorney agreements
Sales Enablement and Marketing Due Diligence
Sales enablement and marketing due diligence requires review of the following:
- List and description of competitors, including strengths, weaknesses, market position, and basis of competition
- Current ad programs, marketing budgets, and printed marketing materials
- Research on ways to get new business
- List of distribution channels, marketing opportunities, and marketing risks
- Surveys and market research on company products
- Comparative analysis
- List of coordination protocols between the sales and marketing departments
- Issues about keeping customers after the sale
- Description of the company’s credit policies,purchasing policies, supply and service agreements
- Schedule of unfilled orders
HR Due Diligence
Human resources due diligence involves review of the following:
- List of employees and their positions, current salaries, years of service, and total compensation over the past three years
- Explanation of the company’s salary philosophy, pay history and pay freeze information
- Resumes, history, and experience of key employees such as senior level management
- List of union affiliations and contracts
- List and description of all employee health and welfare insurance policies
- List of all independent or contract professionals that have worked with the company in the past five years
- Copies of stock purchase and stock option benefits for employees
- Worker’s compensation claims history
- Unemployment claims history
- Turnover data for the past two years
- Documents on pension plan funding and distributions
- Copies of all Occupational Safety and Health Administration (OSHA) examinations
- Results of formal and informal employee surveys
- Layoff and severance package information
- All nondisclosure, noncompete, and nonsolicitation agreements between employees and company.
Intellectual Property Due Diligence
Intellectual property due diligence involves review of the following:
- List of foreign and domestic patent applications
- All licensing revenue and expenses
- Copyright, trademarks, and trade names both domestic and abroad
- Description of methods used to protect trade secrets and all technical information within the company
- Patent clearance documents
- Work-for-hire agreements
- Summary of claims or threatened claims on intellectual property
- Copies of all consulting agreements, invention agreements, and licenses of intellectual property to and from the company
Legal Due Diligence
Critical legal insights include:
- List of all pending litigation, unsatisfied judgments, documents about injunctions or settlements, copies of insurance policies that protect against litigation, correspondence with regulatory bodies such as the SEC or IRS, along with a review of all board minutes, shareholder minutes, and audit minutes
- Copies of federal, state, and local licenses, permits, and consent forms
- Documentation on articles of incorporation and any amendments
- List of company bylaws, amendments, and assumed names
- List of all states or countries where the company does business
- Annual reports for the last three years
- An organizational chart
- List of all shareholders and percentages owned
- Certificate of Good Standing from where the company does business
- Active status reports in the state of incorporation
- Agreements on voting trusts, subscriptions, puts, calls, options, and convertible securities
Property/Real Estate Due Diligence
Property and real estate due diligence requires review of the following:
- List of Uniform Commercial Code (UCC) filings
- Leased equipment
- Major equipment sales and purchases over the past three years
- Schedule of fixed assets with locations
IT Due Diligence
Important considerations and frameworks to understand a company’s IT due diligence include:
- IT roadmap
- Software licensing agreements
- Network and physical security strategies
- Data architecture and strategy
- Security breach history and management
- Compliance standards
- Cybersecurity protocol
- Business continuity and disaster recovery plans
- Security audits and penetration testing
- Code audit and standards of operating systems and anti-virus systems
- Employee education and QA practices
Best Practices for Conducting Due Diligence
Conducting successful due diligence means having the right intelligence and resources at your fingertips to ensure no critical piece of information is missed. Across deal type and industry, some principles hold across every effective diligence process:
Work from a single source of truth. Fragmented information spread across email threads, shared drives, and disparate tools is one of the most common causes of diligence risk. Centralizing your VDR content, internal research, and external market intelligence in one place reduces the chance of conflicting versions or missed documents reaching your IC.
Validate internal assumptions with external intelligence. A data room tells you what the target wants you to know. External sources including analyst reports, expert transcripts, earnings calls, regulatory filings, and news tell you what's actually happening in the market. Cross-referencing both gives you a materially sharper picture of upside, downside, and competitive risk.
Make the process repeatable. Ad-hoc diligence processes are slow and inconsistent. Teams that systematize their approach move faster and make fewer errors, especially under the time pressure of competitive deal processes.
Use AI to scale depth, not just speed. The main value of AI in diligence is its ability to surface patterns, flag inconsistencies, and synthesize across thousands of documents in ways that aren't humanly feasible in a compressed timeline. The best diligence processes leverage AI to go deeper on what matters, not just to process volume faster.
How AlphaSense Enhances Due Diligence
AlphaSense's vast content universe spans over 500M documents, including company filings, earnings transcripts, broker research, expert transcripts, regulatory filings, and news for both public and private companies. Our AI-powered features enhance and accelerate the depth and efficiency of your due diligence at every stage of the process.
Due Diligence Workspace – For deal teams managing complex transactions, Due Diligence Workspace brings your entire diligence process into one AI-powered project space. Sync thousands of VDR files from Intralinks, Egnyte, SharePoint, Box, and more — then combine them with internal materials like CIMs and past deal work, and run specialized AI agents across each phase of diligence. From initial company profiling and VDR analysis to IC preparation, every step is covered in one place, with every insight traceable back to its source. Take a tour of Due Diligence Workspace here.
Workflow Agents – Run pre-built or custom AI agents aligned to each diligence phase, from VDR analysis and business profiling to risk identification and IC-ready output generation. Custom agents optimize every new Workspace, making your diligence process systematic and scalable. Pre-built agents give teams a starting point; custom agents let you embed your firm's specific strategic criteria into every deal.
Generative Search – Our conversational search experience queries across AlphaSense's entire content universe simultaneously across earnings transcripts, broker reports, expert calls, regulatory filings, and news to synthesize an answer in seconds. This is highly valuable for due diligence because the most important questions rarely live in a single source. Ask a natural language question ("Which players are gaining share in this market and why?" or "What are the structural headwinds and tailwinds in this industry?") and Generative Search will surface a synthesized response drawn from across the full content library, with every insight cited back to its source document.
Financial Data – Access standardized financials and consensus estimates across 18,000+ public companies, 4,500+ auditable Canalyst models with segment-level KPIs for deep-dive valuation work, and an M&A Screener with 400+ filters to quickly identify and qualify comparable deals. Search a company's ticker and run thematic searches across broker research and expert transcripts to quickly validate financial assumptions against external market perspectives.
Time Series Analysis – Filter by SEC filings to access income statements, balance sheets, and more, then drill down to export QoQ and YoY data for trend analysis. Filter by earnings calls and see KPIs surfaced directly in the results panel. Click "Show History" to expand your view across all related snippets over time.
Table Explorer – Our Table Explorer extracts and exports financial data from SEC filings quickly and at scale. Features like AI-powered table stitching, restatement detection, and customizable exports dramatically reduce the manual data aggregation work that typically precedes financial modeling and benchmarking.
Tegus Expert Insights – Dive into over 250,000 expert call transcripts to access proprietary insights from former executives, customers, competitors, and channel participants across a range of industries — covering thousands of public and private companies.
Expert Call Services — Gain access to more than one million pre-qualified expert profiles spanning all industries across the globe. Expert Call Services allow you to quickly connect with experts for customized interviews to fill any remaining research gaps in your diligence process.
Channel Checks – A living channel intelligence system designed for high-stakes investment decisions, which includes AI-led interviews with distributors, suppliers, and retailers that surface real-time demand trends, pricing movements, and competitive dynamic signals as they happen — from 350+ tickers across the healthcare, industrials, and tech industries.
Enterprise Intelligence – Use AlphaSense Enterprise Intelligence for secure AI-powered searches, summaries, and follow-up questions across your proprietary internal data, which you can then easily cross-reference with our external sources for deeper, more complete market intelligence.
Streamline Your Due Diligence Process
The firms winning deals today aren’t just working harder — they’re working with better intelligence, faster. With Generative Search that produces diligence-grade analysis in minutes, Channel Checks that surface real-time primary intelligence from the markets, Workflow Agents that compress hours of manual assembly, and a content universe of over 500M premium documents, AlphaSense gives your team an undisputed edge.
Discover why 90% of the world's top investment banks, asset management firms, and private equity managers use AlphaSense to accelerate and enhance their due diligence process. Start your free trial today.
Take an interactive tour of Due Diligence Workspace.
