Key Takeaways
- Undisclosed issues found in diligence always cost more than disclosed ones would have.
- The data room is a trust signal before it is an information signal.
- Keeping the business performing during a diligence process is the hardest operational challenge in an exit.
During the OptionsSwing acquisition process, there was a two-week period where Saim Abbasi genuinely was not sure the deal would close. Not because the company was not performing, but because a discrepancy between the forward projections and the underlying customer data created a trust problem that nearly became a deal problem.
How the Gap Appeared
The financial projections shared at the start of the process had been built using a customer growth assumption that turned out to be optimistic when the actual data was examined closely during diligence. The gap between the modeled retention rate and the actual retention rate for the most recent cohort was about 12 percentage points. Not catastrophic in isolation, but significant enough to materially change the forward revenue picture.
The buyers found it in week three of diligence. They raised it in a tense call where the implicit message was clear: if this discrepancy exists here, what else are we not seeing?
What Saved the Process
The response that kept the deal alive was complete transparency immediately. Saim and the OptionsSwing team pulled together a full cohort analysis, going back to the earliest customers, showing every retention curve, the good quarters and the weak ones, with a clear explanation of what drove the variability. The presentation took four hours to prepare and was delivered the same day the question was raised.
The buyers appreciated the speed and completeness of the response more than the specific numbers. It signaled that the team's instinct under pressure was toward transparency rather than damage control, and that is the quality you most want in a management team you are about to rely on post-close.
The Operational Challenge Nobody Talks About
The hardest part of a due diligence process for any operating company is keeping the business running well while simultaneously supplying an enormous volume of information to a team of analysts, lawyers, and accountants. The distraction is real and it shows up in the numbers. Saim's rule from that experience: assign one person from the company to own the diligence process entirely, so the rest of the team can focus on operations without the constant interruption of document requests.
"The deal almost died not because the business was bad but because the story about the business did not match the data. That gap is the most dangerous thing in any process."