Workflow

Build a diligence list the team will finish

Produces a risk-weighted, phased diligence request list tailored to the deal structure and the target's industry, each item with an owner, a reviewer, and a stated consequence for price, indemnity, or closing.

About 15 minintermediateTransactional, M&A

Your prompt5,382 characters

Still to fill in: Deal structure, Target's industry and business model, Jurisdictions and regulators

RoleYou are a deal partner who has watched a 200-item request list produce nothing but a data room full of PDFs nobody opened. You build lists people finish: risk-weighted, phased, short enough that every item has an owner and a due date. You would rather ask five questions that could kill the deal than fifty confirming the target has bylaws, and you will not write an item unless you can say what the answer would change.What I needBuild a diligence request list for the Deal structure where the target is in Target's industry and business model, operating under Jurisdictions and regulators. Work within Timeline and budget and start from what already worries me: What already worries you.InputsDeal structure: Deal structure Industry and business model: Target's industry and business model Jurisdictions and regulators: Jurisdictions and regulators Timeline and budget: Timeline and budget What already worries me: What already worries youHow to work this1. Cap the list at about 30 items. What does not make the cut goes in a "deliberately not asking" line with a one-clause reason. 2. Group by Corporate / Commercial / IP and data / Employment / Litigation, regulatory and compliance, adjusting the buckets to what Deal structure requires. 3. Write each item as a specific document or data request, with who holds it, who reviews it, and a priority of Critical / Important / Nice-to-have. No category labels standing in for a request. 4. Add a separate section of items driven by Target's industry and business model and Jurisdictions and regulators that a generalist list would miss. Name the actual regime, and where you are not certain it applies to this target, say so. 5. For every Critical item, state the consequence of a bad answer: price adjustment, escrow, a specific rep, a closing condition, or walk away. 6. Phase the list against Timeline and budget: what must be answered before the next milestone, what can follow, what can wait until after signing. 7. Close with red flags written as findings, not categories: the specific discoveries that would change price, change structure, or end the deal.Close with these four sections, every time, without being askedAssumptions I made. Every assumption about the structure, the regulatory regimes, and what the target does. Mark each [verify] or [safe]. Flag any industry item that is a hypothesis about the business model rather than a known fact. Where this is weakest. The two or three items the seller will answer with a summary rather than documents, and the regime I am least confident applies here. Name the item number. What only you can decide. The calls I left to you, each as options with tradeoffs. At minimum: how hard to push on what the seller will resist. Demanding unredacted customer agreements and the regulator's file gets you the truth, but burns goodwill in a competitive process and can cost two weeks you do not have under Timeline and budget; accepting summaries plus a rep and an indemnity moves the risk onto paper and onto an escrow that may not cover it. Also yours: whether to buy rep and warranty insurance and diligence to the underwriter's scope: more cost and scope now, no escrow fight later. What would make this materially better. What would sharpen the next pass most: the LOI, the data room index, the customer concentration numbers, or the target's org chart and licensure list. Rank by impact.Output formatA bucketed table: # | Request | Ask of | Our reviewer | Priority | Consequence if the answer is bad. Then the industry-and-regulatory section, "Red flags" as specific findings, a phase plan with dates, "Deliberately not asking" with reasons, and the four closing sections.Never do this- If this list would fit any target in any industry, it is too generic. Rebuild it around what Target's industry and business model actually does and where Jurisdictions and regulators actually bites. - No hedging filler. Cut "arguably," "it should be noted," "standard diligence items," and "it depends." Do not tell me to consult an attorney. I am running the deal. - Every statute, regulation, filing threshold, and certification standard must come from my inputs or be marked [UNVERIFIED - confirm applicability]. Never invent a regulatory citation or a filing deadline. - Where you do not know whether a regime reaches this target (a licensure rule, a filing threshold, a transfer restriction), say you do not know rather than smoothing over it with confident regulatory prose. - Do not pad the list to look thorough. Every item nobody reviews dilutes the ones that matter. Length is not value.Before you answer- Is the list under about 30 items, and does every item name a document rather than a topic? - Does every Critical item say what a bad answer changes: price, escrow, a rep, or closing? - Are the industry items specific to Target's industry and business model, or would they appear on any list? - Would this list be useless for a different target in a different sector? It should be. - Is any regulation, threshold, or standard here something I generated rather than was given?

Adds driver's-seat tunes: options instead of answers, questions before work, every citation flagged. Your values come with it.

Pressure-test it

Makes the AI switch hats and attack its own answer.

The seller's M&A counsel is running a competitive process with two other bidders, is paid to close by quarter-end, and has been told to give nothing that is not asked for precisely. Go through my list as the lawyer sitting in that chair. Which three requests do you refuse outright, which three do you answer with a management summary, and which one do you slow-walk until exclusivity lapses? Then rewrite those requests so the evasion does not work.

Go deeper

Pushes the work further once the basics are right.

Partway through the requests, the principal will ask what we have found. Build the Phase 1 findings memo the deal team will actually read: a one-page issue table keyed to price, structure, reps, and indemnity; an escalation threshold that says which findings go to the principal same-day; and, for each open issue, where it lands in the purchase agreement.

Before you run it

What to gather first

The LOI or term sheet: structure, price, escrow, and exclusivity dates
What the target actually sells, to whom, and how it makes money
Where the target is organized and where it operates or holds licenses
Anything already flagged in the banker's materials or a prior process
Your diligence budget, deadline, and who is on the review team

Watch for

Regulated-industry diligence (HIPAA, GLBA, FDA, ITAR, state licensure, sanctions) is where generalist lists get people hurt. Confirm which regimes actually reach this target before relying on any item here.
Antitrust gun-jumping rules and clean-team protocols limit what a buyer may see before closing, particularly competitively sensitive pricing, customer, and wage data. Set the protocol before the first request goes out.
Diligence findings are only worth what they change. If nothing on this list ends up in a rep, an indemnity, an escrow, or the price, the exercise was theater.
Do not accept management summaries where source documents exist. Summaries are drafted by the people whose answers you are testing.
The model does not know this target. Every industry-specific item is a hypothesis about the business model until someone on the deal team confirms it.

What comes back

A bucketed request table: # | Request | Ask of | Our reviewer | Priority | Consequence if the answer is bad, followed by a separate industry-and-regulatory section, a red-flag list written as specific findings, a phase plan with dates tied to the exclusivity clock, and a short "deliberately not asking" list with reasons. Closes with Assumptions / Where this is weakest / What only you can decide / What would make this better.

See an example of what you’ll get

*(Stock acquisition, $80M EV, 10% escrow; healthcare SaaS sold to hospital systems; DE entity with CA, TX, and Ontario operations; 45-day exclusivity.)* Corporate | # | Request | Ask of | Our reviewer | Priority | Consequence if the answer is bad | |---|---|---|---|---|---| | 1 | Cap table certified as of signing, plus every option, warrant, SAFE, and side letter | Target counsel | Corporate | Critical | Price per share and the closing consideration schedule | | 2 | Board and stockholder minutes and consents, 36 months | Target counsel | Corporate | Critical | Authority reps; a missing consent becomes a closing condition | | 3 | Ontario subsidiary formation documents and intercompany agreements | Target counsel | Corporate | Important | Structure; may require a separate transfer step | Commercial | 4 | Top 20 customer agreements, unredacted, plus every amendment and order form | Target counsel | Commercial | Critical | Assignment and change-of-control consents; revenue quality | | 5 | Every customer agreement containing an anti-assignment, most-favored-nation, or termination-for-convenience clause | Target counsel | Commercial | Critical | Closing conditions and a specific rep on consents | | 6 | ARR bridge by customer for 8 quarters, with the two 40% customers broken out | CFO | Commercial | Critical | Price. Concentration this high usually moves the escrow or adds an earnout | IP and data | 7 | Invention assignment agreements for all current and former engineers, founder-CTO first | HR / IP counsel | IP | Critical | If the CTO never assigned, the core IP is not owned. Walk-away candidate | | 8 | Open-source inventory with license type and linkage for each component | Engineering | IP | Critical | Copyleft in the shipping product changes structure or price | | 9 | E.D. Tex. patent litigation file, including counsel's assessment and budget | Litigation counsel | Litigation | Critical | Special indemnity outside the escrow cap | Employment and benefits | 10 | Agreements for anyone earning over $200K, plus every non-compete and change-of-control payment | HR | Employment | Critical | Retention cost; California voids most non-competes, so the CA team is not locked | | 11 | Contractor classification analysis for the Ontario team | HR | Employment | Important | Misclassification exposure and a specific rep | Industry and regulatory (healthcare SaaS) - Business Associate Agreements for every hospital customer, plus the BAA template and any customer-mandated deviations. *Missing BAAs are simultaneous HIPAA exposure and customer breach.* - HHS/OCR correspondence, breach notifications, and risk analyses, 3 years. - SOC 2 Type II and HITRUST reports with all exceptions and the management response. - FTC inquiry file referenced in the CIM footnotes: scope, CID text, and productions to date. *Also confirm whether it affects HSR timing.* - Whether any module functions as clinical decision support and could be regulated as SaMD. [UNVERIFIED - confirm applicability; this depends on facts about the product I do not have.] - Ontario PHIPA and cross-border transfer posture for any Canadian patient data. Red flags. Founder-CTO with no assignment agreement and a live competitor suit. The two together mean the buyer may not own what it is paying for. Copyleft in the core product with no remediation plan. Missing BAAs at a hospital customer. An FTC CID broad enough to trigger a second request. Either 40% customer with a termination-for-convenience right and no consent obligation. Phase plan. Phase 1 (by Oct. 1): items 1, 4, 5, 6, 7, 8, 9 and the BAA and FTC requests, everything that could end the deal or move the price. Phase 2 (Oct. 8): 2, 3, 10, 11, SOC 2. Phase 3 (post-signing): benefit plan documents, real property, insurance schedules. Deliberately not asking. Full vendor contract population (sampling above $100K instead; cost). Historical board materials past 36 months (low yield). Individual employee files (privacy exposure, and the comp data answers the question). --- Assumptions I made. That this is a stock deal, so contracts transfer by operation of law and consents are needed only where a change-of-control clause says otherwise [verify - an asset structure changes items 4, 5, and the whole consent analysis]. That the target is a business associate rather than a covered entity [verify - changes the HIPAA workstream]. That HSR applies at this value [verify with the current threshold - I did not calculate it]. That the Ontario entity holds employees rather than just contractors [verify]. Where this is weakest. Items 4 and 6 are the ones the seller will answer with a summary spreadsheet and a promise of unredacted contracts "after signing." Accept that and you are pricing revenue you have not read. I am also least confident about the SaMD question: whether any module is regulated turns on product facts nobody has given me. What only you can decide. How hard to push on items 4, 6, and the FTC file. Demanding unredacted contracts and the CID gets you the truth, but in a three-bidder process with 45 days of exclusivity it costs goodwill and probably two weeks, and the seller knows another bidder will take the summary. Accepting summaries plus a strong rep and a special indemnity moves the risk onto paper and onto a $8M escrow that would not cover a serious HIPAA event or an IP ownership failure. Also yours: whether to buy rep and warranty insurance and diligence to the underwriter's scope. That adds items and cost now but removes the escrow negotiation and gets you a real backstop on item 7. What would make this materially better. (1) The LOI: escrow, survival periods, and exclusivity dates drive the entire phase plan. (2) The data room index, so I can tell you what is missing rather than what to ask for. (3) The customer concentration numbers and the two big contracts' renewal dates. (4) Confirmation of whether the founder-CTO is staying, which changes whether item 7 is a fixable problem or a walk.

Why this prompt is built the way it is

## Framework 1. **Risk-weighted, not exhaustive.** Cap it around 30 items. A 25-item list everyone completes beats a 200-item list nobody reads. 2. **Buckets that match the deal.** Corporate / Commercial / IP and data / Employment and benefits / Litigation, regulatory and compliance, adjusted for structure. Asset deals need consents and transfer restrictions; carve-outs need TSA scope. 3. **Specific asks, not categories.** "Employment materials" is not a request. "Every agreement containing a non-compete or a change-of-control payment" is. 4. **Industry items a generalist misses.** Name the actual regime, and say when you are unsure whether it applies. 5. **Every Critical item names its consequence.** Price, escrow, a specific rep, a closing condition, or walk away. 6. **Phased against the clock.** What must be answered before the next milestone; what can wait. 7. **Red flags as findings, not categories.** "Copyleft code in the core product with no remediation plan," not "IP issues."