The map
Rows are the risks. Columns are the stages of the deal. Color shows where each risk tends to do the most damage, based on what we see working with deal teams and portfolio companies.
| Risk | 1Pre-LOI | 2Diligence | 3Sign to close | 4First 100 days | 5Hold | 6Exit |
|---|---|---|---|---|---|---|
| Systems that don't talkThe add-on patchwork | Watch | High | Watch | High | High | High |
| Numbers you can't trustReporting built on spreadsheets | Watch | High | Watch | Watch | High | High |
| Email and wire fraudSpoofed partners, fake invoices | Lower | Watch | High | High | Watch | Watch |
| Unmanaged AI useClaims, tools and leaked data | Watch | High | Lower | Watch | High | High |
| Vendor and contract exposureWho touches your data | Lower | High | Watch | High | Watch | Watch |
| Access and key-person riskThe one person who knows | Lower | Watch | High | High | Watch | Watch |
What each risk looks like
What to look for, where it hits the numbers, and one question to ask before you sign.
Systems that don't talk
Peaks: Diligence, first 100 days, hold, exitWhat it looks like
Each add-on keeps its own accounting, CRM and IT setup. Three divisions run three systems, and nobody owns pulling them together.
Where it costs you
Integration savings in the model never arrive. Overhead grows with every acquisition instead of shrinking, and buyers discount the platform for the cleanup they will inherit.
Ask before you sign
How many separate systems does finance pull from to close the month, and who owns combining them?
Numbers you can't trust
Peaks: Diligence, hold, exitWhat it looks like
Board reporting depends on someone stitching spreadsheets together by hand. Two reports of the same metric give two different answers.
Where it costs you
Quality of earnings takes longer and finds more adjustments. During the hold, decisions run on numbers that are weeks old.
Ask before you sign
How many days after month end does the board see final numbers, and how many manual steps happen in between?
Email and wire fraud
Peaks: Sign to close, first 100 daysWhat it looks like
Large wires, new bank details and lots of unfamiliar people emailing each other. That is exactly the setting fraudsters look for when they impersonate a partner, a lawyer or a seller.
Where it costs you
A redirected wire or a fake invoice is cash out the door, often unrecoverable, and it lands at the moment everyone is too busy to notice.
Ask before you sign
How does every party confirm wire instructions, and is it something other than email?
Unmanaged AI use
Peaks: Diligence, hold, exitWhat it looks like
The CIM promises AI-driven growth that is mostly a pilot. Meanwhile staff paste customer and financial data into free AI tools nobody approved.
Where it costs you
You pay for capability that isn't there, and you carry data exposure nobody can measure. At exit, buyers will test the AI story harder than you did.
Ask before you sign
Which AI tools are in use today, who approved them, and what company data goes into them?
Vendor and contract exposure
Peaks: Diligence, first 100 daysWhat it looks like
Dozens of software subscriptions and outside providers, many duplicated across add-ons, some with access to sensitive data and no clear contract terms.
Where it costs you
Paying several times for the same tool, change-of-control clauses that surprise you after close, and a vendor breach that becomes your incident.
Ask before you sign
Which vendors can see customer or financial data, and which contracts change or end on a change of control?
Access and key-person risk
Peaks: Sign to close, first 100 daysWhat it looks like
One IT person or one outside provider holds every password. Former employees still have access. Nothing is written down.
Where it costs you
If that person leaves during the transition, the business can lose control of its own systems. Old accounts left open are a common way in for attackers.
Ask before you sign
What breaks if the one person who runs IT quits next week?
Want this run on one of your companies?
We'll walk through the six risks for a single portfolio company or live deal and tell you which ones are worth your attention. No cost, and you keep the findings.
Secure a Strategic Debrief