Sell-Side vs Buy-Side Due Diligence Side-by-Side
Chapters in this video
- 0:00 The eight shared due diligence workstreams and two opposing mindsets
- 1:26 Data room and site visit verbs: Sam builds and hosts, Blake consumes and inspects
- 2:03 Active recall trap: who actually coordinates the schedule
- 2:49 Financial due diligence and risk discovery: defense versus offense
- 3:27 Reverse due diligence as a sell-side solo mission
- 4:27 Buy-side solo missions: cost savings and background checks
- 5:54 Core goals that make the tasks intuitive: closing certainty versus price discipline
- 6:45 Rapid-fire exam recap
What this video covers
- Why the sell-side banker builds, indexes, and manages the data room while the buy-side banker consumes, queries, and follows up
- How site visits are hosted by the sell-side but scheduled, coordinated, and inspected by the buy-side
- What reverse due diligence (reverse DD) is: investigating the buyer's ability and willingness to close, and why this is strictly a sell-side task
- Why background checks on target leadership are buy-side only, and why the sell-side banker never runs background checks on his own client
- How cost-savings identification (synergies) serves as the buyer's argument for paying a premium, and why the seller does not perform this workstream
- The difference between sell-side defensive risk discovery (prepare, remediate) and buy-side offensive risk discovery (surface, quantify, negotiate)
- How to use the core goals of closing certainty versus price discipline to intuit which side a fact pattern describes
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