Checking the numbers is only half the job—aligning with the investment thesis is where the real DD begins.
There’s a quiet tension in many diligence processes. Not because anything is wrong with the numbers. The elephant in the room is that investor and management teams are often making totally different assumptions about what happens after the deal closes.
In the best cases, they’ve already built a joint vision for the next stage of growth. But more often than not, there’s some daylight—sometimes a chasm—between what each party believes they’re signing up for. In the worst cases? Neither side is clear with many options in front of them,
So what is the investment thesis?
It’s the central story of why the investor believes this deal will generate a return. It’s not just about the financials—it’s about how the business will create value from this point forward.
The thesis could be one of many, and not limited to:
- Growth Investment: Inject capital, talent or strategic guidance to accelerate top-line growth—often involving international expansion, product launches, or moving upmarket.
- Operational Improvement: Optimise, systematise, and improve margins. Often a PE favourite.
- Buy and Build: Use the current platform to bolt on other businesses and build something much bigger.
- Harvest Investment: Keep the business running as-is, extract value over time (often via dividends), and maybe trim non-core operations. Think less sprint, more stroll.
For example, an investor stated: “This is a growth investment, not a harvest investment.” Yet during DD it was clear the founder had been thinking he was about to partner with someone who’d let him slow down a bit. The investor was gearing up for a sprint. Aligned? Not even close.
Diligence isn’t just about validation. It’s about vision.
When we do Tech DD, we ask more than “is the codebase solid?” or “can the platform scale?” We ask:
Does this architecture support the next phase of the investment thesis?
And the same applies across all aspects of DD. For example:
- If this is a growth thesis, can the team deliver at speed? Is the platform extensible? Is the data model future-proof?
- If it’s a harvest thesis, are the systems stable and low-maintenance? Can the current team maintain them without constant oversight?
Aligning expectations early
This is where Beyond M&A earns its name—we don’t just validate what is, we help make sense of what’s next.
When we work between investor and founder, we make the investment thesis visible. We pressure-test it against operations, tech, and team capability. We surface assumptions early—before they become expensive surprises post-deal.
Because alignment doesn’t happen by accident. It’s designed into the process.
