You’re on the trail for an acquisition. You’ve found one that looks promising and you get an agreement on a term sheet. Now, it’s time to do, you’re homework on the transaction before it closes. In other words, work on what’s commonly called, "Due diligence."

I’d like to call it a different term – "Do diligence."

It’s a play on words, but there’s an important psychology with it.

Due is a very reactive word. Do is very proactive. You can make a case that yes a lot of the material is due you. However, even if it’s due you, it’s still up to you to make sure you get it. It’s still up to you to make sure that it really happens to your satisfaction as the buyer. Being to your satisfaction means not only do you get the material, but it’s also in a form that you want and that it’s understandable, with any questions getting explained by the seller.

Due implies the ownership is with the seller. Do, on the other hand, means that you are taking responsibility for the information as the buyer.

So you probably have some sort of checklist for items that you’re looking for to be provided by the seller. Take a proactive approach to that list. Make sure you get it. Make sure it comes in a timely fashion and make sure it’s in workable form for you to be able to use because, for after all, you still need to do it even if it is due you.

Jon Paul, MBA, CPA, CMC, CM&AA

President, Value Added Finance Resources
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