Due Diligence on an Acquisition Target — The Agent's Report Was Better Than the Banker's

The Problem

When you're evaluating an acquisition, the first 48 hours matter more than people admit. You need to know: Is this company worth a deeper look? What are the obvious red flags? Where should the lawyers focus?

Traditional DD process:

• Engage an investment bank. $100K+ retainer. NDA dance takes a week.
• Bank assigns a team. They start with the same Google searches you'd do.
• Four to six weeks later, you get a 200-page deck. Half of it is boilerplate.
• The real insights are buried on page 147.

The problem isn't that bankers are bad. They're thorough. But the first pass — the "should we even pursue this" phase — doesn't require a $100K engagement. It requires fast, structured research across public sources.

We had a target company in the privacy-tech space. Board meeting in three days. We needed a preliminary DD report yesterday.

The Solution

Pauly ran the Gemini Deep Research skill with a DD-specific prompt template. The agent cross-referenced company history, team backgrounds, financial signals, IP portfolio, legal exposure, and market positioning — all from public sources.

The output: a structured due diligence memo with red flags highlighted and a preliminary deal recommendation.

The Process

The request to Pauly:

Due diligence report on [REDACTED] — privacy-tech company, Series B.

I need:
- Company history and founding story
- Full team analysis (founders, C-suite, board, key engineers)
- Financial trajectory (funding rounds, revenue signals, burn indicators)
- IP portfolio (patents filed/granted, open-source contributions)
- Legal exposure (lawsuits, regulatory actions, compliance gaps)
- Competitive positioning vs alternatives
- Red flags and deal-breaker risks
- Preliminary recommendation: pursue / pass / conditional

Pauly's skill config added DD-specific source priorities:

deep_research_config:
  mode: due_diligence
  source_priority:
    - crunchbase_profiles
    - linkedin_team_data
    - patent_databases
    - court_filing_records
    - news_archives
    - glassdoor_signals
    - github_activity
  red_flag_detection: true
  output_sections:
    - executive_summary
    - company_overview
    - team_analysis
    - financial_trajectory
    - ip_portfolio
    - legal_risk
    - competitive_position
    - red_flags
    - recommendation

The agent ran for 22 minutes. It searched Crunchbase for funding history, LinkedIn for team movements (two C-suite departures in 6 months — flagged), patent databases for IP strength, court records for litigation history, news for any negative coverage, Glassdoor for internal culture signals, and GitHub for engineering output.

The Results

Key findings the agent surfaced that the bank's initial assessment missed:

1. CTO departure — left 4 months prior, now at a competitor. Not in the bank's preliminary.
2. Patent gap — core technology relied on a single patent with a pending challenge. Bank found this in week 3.
3. Glassdoor trend — ratings dropped from 4.2 to 2.8 over 12 months. Classic pre-exodus signal.
4. GitHub activity cliff — commit frequency dropped 70% in the last quarter. Engineering team checked out.
5. Founder's previous company — failed in a similar regulatory environment. Pattern risk.

Our deal team walked into the bank's first meeting already knowing where to push. The bankers were impressed. We didn't tell them an agent did the homework.

Try It Yourself

mrchief skills install deep-research

Write a DD prompt with the target company name, sector, and specific concerns. The agent does the rest. Use the output as your research foundation — not your final decision.

You still need bankers for the real diligence. But you stop paying them to do work an agent handles in 20 minutes.

The best negotiation advantage is knowing more than the other side thinks you know. Agents make that trivially cheap.