Hello All -
1st year associate here in LMM and was curious about how other junior folks go about conducting commercial diligence on a target (competitive position, value chain, industry analysis) in an industry where you have no prior experience in. Our enterprise values are low so we typically in-source our commercial diligence. I've been able to get by with my own approach, but coming from industry-specific M&A I have found it difficult to put together a repeatable method across deals for the less financial / data parts of diligence.
Has anyone else experienced a similar aspect and have you put together frameworks or processes to start a competitive analysis? Obviously this is key to any investment so trying to see if there are ways I can improve my approach and make it more efficient.
#1 step is get on the phone with as many formers as possible. Go on LinkedIn and offer them $100 for an hour of their time. Ask them basic landscaping questions like you would ask if you had budget do a full commercial diligence survey (e.g., who are your competitors, what do they do differently, how have they changed over time, that type of stuff). You can get a long way from 10 calls for only $1k of expenses. The LinkedIn Sales Navigator tool is perfect from this. And this process is fairly easy to come up with frameworks that emerge from initial calls that you can put down on paper to walk through other people with so you will sound like you know the industry in and out.
Could you specify who you're referring to when you say "formers"?
Former employees of a company you are currently interested in. As should go without saying but you absolutely cannot talk to current employees of a potential acquisition. But also, former employees of other companies in the same market as the company you are interested in.
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