Signing the letter of intent feels like crossing the finish line. It is not. It is the starting gun. And the scrutiny waiting on the other side is heavier than ever.
A study from Bayes Business School and SS&C Intralinks looked at more than 900 global deals and found that average pre-announcement due diligence has stretched to roughly 203 days. A decade earlier that figure sat closer to 124 days. The study measured the full span from the day the data room opens to the day the deal is announced. It does not mean every seller spends 203 days in post-LOI diligence. It means the scrutiny phase around deals has grown longer and more demanding.
In my most recent book The Business Sale Paradox I describe something I call the LOI Paradox. Signing the letter of intent feels like the moment you won. In reality it is the moment your leverage starts to drain. Before you sign you can talk to other buyers. After you sign you usually cannot. You are in exclusivity. The buyer now has time and a clear field and every incentive to look for reasons to pay less. The longer diligence runs the more time they have to find them.
This is why the trend matters even if your own deal never runs 203 days. The formal post-LOI buyer diligence usually runs eight to twelve weeks. That is still plenty of time once you are in exclusivity. Every one of those weeks is a week the buyer spends inside your financials looking for something. Something that justifies a lower price. Something that justifies more structure and less cash. Something that justifies walking. Time is not your friend after the signature. Time belongs to the buyer.
There is a second framework that lives right next to this one. In the book I call it the Four Pillars of Sale Readiness. It is a simple self assessment across four areas. Personal and emotional readiness. Financial strength. Transferable value. And diligence readiness. Most owners obsess over the first three and ignore the fourth. Diligence readiness is whether your company can survive being taken apart and examined for half a year without something embarrassing falling out. A weak fourth pillar is where good deals go to die.
Now here is the part that is genuinely new.
One 2026 analysis of what buyers actually test in diligence describes a workstream that did not exist a few years ago. It is built entirely around artificial intelligence exposure. The analysis describes buyers asking how dependent the company is on outside AI models. How defensible its data is. Whether its core work could be automated by the tools coming next. And whether the few people who understand its AI systems are likely to stay. This is one firm’s framing of the market rather than a universal standard. But the direction is hard to ignore. Bain has reported that roughly one in five strategic dealmakers walked away from a deal because of the expected impact of AI on the target. The concern is no longer theoretical.
Think about what that means for an owner getting ready to sell. You can have clean books. You can have a great team. You can have customers who love you. And you can still take a hit in diligence because a buyer decides a cheap tool might do twenty percent of what your business does in three years. Whether that fear is fair is beside the point. If the buyer believes it they will price it.
Most sellers are walking into this blind. They prepare a strong financial package. They get a quality of earnings review done. They organize the data room. And then a buyer asks a question about AI risk that they have never once considered and the room goes quiet. That silence is expensive. It does not just cost confidence. It hands the buyer a reason to reopen price.
So what does diligence readiness look like now.
It means assuming the buyer will be inside your business for six months not six weeks. It means writing down the honest answer to every uncomfortable question before a buyer asks it. Customer concentration. Owner add backs that may not survive scrutiny. Contracts that auto renew versus contracts that quietly expire. And now the newest one. How exposed is what we do to the tools that are getting cheaper and better every quarter.
You do not need a perfect answer to that last question. No one has one. You need a thoughtful answer that you can defend without flinching. The owner who has clearly thought about AI risk and has a real point of view looks like someone in control. The owner who has never considered it looks like someone who can be pushed. In diligence those two owners get very different deals.
The letter of intent is not the finish line. It is the moment the buyer gets a clear shot at your business with no one else in the room. The work that protects you happens long before you ever sign. By the time the clock starts it is too late to build the case. You can only present the one you already have.
More on the LOI Paradox and the Four Pillars of Sale Readiness in The Business Sale Paradox.
Source: https://valutico.com/what-buyers-actually-look-for-in-2026-due-diligence/
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