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Sample Due Diligence Questionnaire
SmartBooks.com/free-consultation
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Ref # Detailed RequestStatusData Room IndexAnswer / ResponseFollow-up QuestionsOther
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1.0 Customers / Contracts
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1.1 Please provide revenue type by customer, updated for latest trailing 12 month period, with unredacted names (please keep redacted names index, however, so we can cross-reference).
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1.2 Please provide list of all customers, their revenue for the latest trailing 12 month period, and corresponding start dates, renewal dates, and contract terms
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1.3 Please provide contracts for the laregest 25 customers (including backlog) and highlight revenue types in the contracts that tie back to the revenue by customer file/P&L
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1.4 Please provide latest unredacted backlog information with projected monthly revenue amounts. Please ensure that backlog customers are not being double counted in P&L
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1.5 Please provide historical renewal success on a by customer basis
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1.6 Provide details on how contracts are priced. Is there a mechanism to estimate costs and price contracts accordingly?
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1.7 Are there any known, impending churn events?
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1.8 Please provide FY20## financial projections (and detailed model, if available)
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2.0 Sales and Marketing
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2.1 Historical bookings by revenue type by sales rep and lead source. Include sales rep quota and % quota achieved for each rep. Info back to 20## would be helpful
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2.2 Overview of current/prior sales organization, commission / compensation, quota information, and ramp period
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2.3 Provide historical win/loss rates and the win/loss rate for the most recent trailing 12 month period.
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2.4 Walk us through the top 10 customers. What was the overall sales/contracting process? How was the contract priced? What amount of time did it take? Overall, why did you win? How profitable are those customers?
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2.5 Walk us through the top 10 customer sales opportunities that you lost in the most recent trailing 12 month period. What competitor won each deal and why did you lose?
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2.6 Pipeline analysis - lead sources and conversion rates by lead source dating back to 20##
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2.7 Please provide latest unredacted pipeline information with projected monthly revenue amounts, projected close date, and win probability
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2.8 Please provide pipeline value over time, including # of opportunities and $ values
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2.9 Detailed description of each stage of sales process and how this translates to probability weighting in pipeline
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2.10 Detailed breakdown of marketing spend and leads from each channel. What has been the historical marketing strategy?
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2.11 Please walk us through largest churn events of last year. Who were the customers? What industry and size? Why did they churn? What efforts were made to retain the account?
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3.0 Financials
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3.1 Provide the QuickBooks backup file as well as the administrator login information. We can provide access to a shared folder to upload this file to, if needed. If you do not use QuickBooks, provide access to your financial accounting system. Many of our preliminary financial requests can be filled by providing access to your financial reporting system or providing the QB backup file (as relevant).
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3.2 Provide copies of all bank statements and bank reconciliations for each month for 20## and 20##
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3.3 Provide all sales and use tax filings and property tax filings for 20## and 20##
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3.4 Provide copies of the year-end payroll report for 20## and 20##. Also provide a listing of all current employees and provide their date of hire, job title, base salary and bonus received (if any) in 20##.
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3.5 Provide copies of all lease agreements.
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3.6 Provide copies of all third-party debt agreements.
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3.7 Schedules of accrued expenses, deferred revenues and prepaid expenses as of Dec-20##, Dec-20## and Feb-20##
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3.8 Copies of all employee bonus plans
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3.9 Most recent three annual financial statements plus current year-to-date. Audited financial statements for last 3 years, if available. If no audit, then explain revenue and expense recognition policies and any deviations from GAAP.
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3.10 Gross margin by customer
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3.11 How do your track employee utilization? Please provide any supporting files that are used to track utilization of employees
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4.0 Human Resources
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4.1 What does the hiring process look like? Where do you find technical talent? How do you plan for future hires given the company's growth?
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4.2 What credentials/certifications do employees need? How long does it take to get these credentials/certifications?
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4.3 Full employee census detailing titles, departments, locations, salaries, bonuses, and any other relevant information
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4.4 Copies of all employment contracts
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4.5 Copies of all confidentiality and invention assignment agreements, including consultant or contractor agreements, if any, between the Company and all employees, consultants, or contractors, as the case may be. Please provide a summary of all such agreements on which employees or other service providers have excluded any intellectual property, including the name of the employee or service provider, the date of the agreement and the nature of the excluded intellectual property.
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4.6 A list of any employees or consultants who have not signed proprietary information and invention agreements, including a list of any periods of time when employees or consultants performed services for the Company while not bound by such agreements.
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4.7 List of all employee benefits offered including the nature of the plan, cost, cost splits between employer and employee, and enrollment rates
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4.8 Any key person benefits or insurance policies
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4.9 Provide Summary Plan Descriptions, Section 125 Plan Document, ERISA Plan documents, employee Open Enrollment Kit, and most recent Section 125 discrimination testing results.
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4.10 If there is an employer match or profit sharing contribution, provide the formula
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4.11 All material correspondence, memos, rulings, determinations, etc. relating to any employee benefits plans and their compliance with applicable law, their status under tax laws or audits of such plans, including all Form 5500s for the last three years.
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5.0 Legal
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5.1 List of any trademarks, patents, patent applications, trade names, service marks or copyrights, or similar rights, owned or licensed by the Company or used (or expected to be used) in its business.
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5.2 To the extent not listed above, all and any intellectual property necessary to conduct of the Company or assets
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5.3 All outstanding leases for real and personal property.
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5.4 List of any agreements that are material to the business of the Company that are not in written form and a brief summary of the terms
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5.5 List of all litigation involving you, whether filed, threatened, or expected
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6.0 Insurance
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6.1 List of all insurance policies including type, carrier, coverage limits, and renewal dates
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6.2 Does the company have any Surety Bonds including ERISA? if yes, list.
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6.3 Do employees drive vehicles as part of their job? If yes, list of any compnay-owned vehicles and and Hired and Non-Owned Auto insurance details.
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6.4 Is the Company in a PEO? If so, (i) Please provide total annual admnistrative fee; (ii) is Employment Practices Liability included?
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6.5 (i) Does the Company process credit card payments? (ii) Does a third party process credit card payments? If so, (iii) please provide annual number of transactions; (iv) how does the Company maintain PCI Compliance?
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7.0 Other
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7.1 Please provide an overview of tools and platforms, both third and first party, that are used in both service delivery and back end processes
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7.2 Copies of Board Decks distributed since 20##
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7.3 Copies of operational metrics the company uses to track internal performance and the results each period for the past three years.
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7.4 Chart of all legal entities and capitalization table for each entity.
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7.5 List of 25 largest vendors in the T10Mo period including name and amount paid.
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7.6 Copies of all vendor contracts significant to the operation o fyour business.
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