Who actually tells you the truth on a channel check
The flagship distributor will tell you the company is great. The tier-2 supplier will tell you orders fell.
That is the whole game. Candor tracks inversely with how much the source depends on the target.
Prioritise tier-2 suppliers, smaller resellers and churned customers. They are frequently the most candid people in the chain.
Source types and what each one actually gives you
- Suppliers and contract manufacturers. Order volumes, capacity, payment terms, cancellations, mix shift toward lower-priced SKUs. Declining orders contradict guidance faster than anything in a data room.
- Distributors and resellers. Sell-through, discounts, quarter-end spikes, rebates, returns, distributor financing. This is where channel stuffing shows up.
- Customers and end-users. Usage depth, renewal intent, product value. Churned customers give you the sharpest read on product weakness.
- Procurement leaders. Concessions, renewal pressure, and the one question that matters: is this must-have or nice-to-have?
- Competitors. Win/loss rates, pricing moves, contestable accounts. Ask about the target's strengths too, not just weaknesses.
- Former employees. Missed launches, backlog stress, morale, execution gaps that never get disclosed.
Track source type on one page. Otherwise you over-weight one loud expert and call it conviction.
Vetting
Role, tenure, recency, proximity. Filter out anyone close enough to the target to be sitting on material nonpublic information. That is a screening problem, not a judgement call you make mid-interview.
Where this fits in a PE process
Pre-LOI: validate customer stickiness, pricing power, supply resilience and concentration risk. Confirmatory DD: pressure-test whatever the QoE could not see. Post-close: keep the panel running.
Splitting calls by region, vertical and account size does more for signal quality than adding calls. Five well-chosen sources beat fifteen from the same segment.
The upgrade most teams never make
Move from ad hoc calls to a quarterly tracking program. Keep a simple database: expert, date, topic, source type, conclusion, follow-up needed. New associates then start from prior intelligence instead of rebuilding the map every deal.
Anyone here running a standing quarterly panel across portfolio companies? Or is it still all deal-driven bursts that go cold the week after close?
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