Module 5

Red flags and findings: turning what you read into what the client can use

A reviewer who has read a thousand pages and reports a thousand pages has not finished the job. The client does not want to know everything that the data room contains; the client wants to know what changes the decision, the price or the plan. Turning what you read into findings is a distinct skill. It needs judgement about which matters are serious, a way of putting a figure on exposure without pretending to precision, a clear separation of problems that can be fixed before closing from those that cannot, and a writing style that states the fact, the source, the consequence and the remedy in a few lines. The skill also has a hazard: the temptation to report everything, which hides the important items, and the opposite temptation to report only the serious ones, which hides the pattern. This module teaches how to rank, how to quantify, how to classify, how to write a finding and how to organise findings in a register. The next module turns findings into protections in the deal documents.

General education on legal due diligence, using invented companies, contracts, people and figures. It states common practice in simplified form and does not describe any one country's law, which differs and changes; rules on disclosure, the effect of a buyer's knowledge, privilege, data protection, competition law and liability in particular vary. It is not legal advice, and it does not replace advice from a qualified lawyer on a real transaction.