The Due Diligence Information Request

A good Consultant will have a Due Diligence Information Request form for the Seller to fill out. This laundry list will cover the list of documents that the Buyers attorney is sure to ask for. Ventana Capital Partners uses an eleven page request form. The document request is voluminous; however, it is necessary to finalize the reverse merger transaction as soon as practicable. It also gives notice to the Seller that this is serious business. The transaction requires the Seller to provide documentation in a timely manner. Once the Seller has completed the information request the Consultant can then start to locate a suitable Buyer. If the Seller balks about completing the document request the Consultant will know immediately the Seller is not serious about selling the shell and will drop the Seller. Buyers do not want to waste their time with Sellers who are not co-operative.

While the Seller is producing all of the necessary documentation for the potential Buyer the Consultant is reviewing the documentation so he can better understand the nuances of the deal prior to involving the Buyer. If there are any inconsistencies or missing documentation the Consultant can assist the Seller with providing the missing pieces. The better prepared the Seller and Consultant are the quicker the transaction can be completed. The Due Diligence Information Request is an extremely important document for it provides all the essential due diligence documentation that will be required by the Buyers attorney. I have seen many a deal “blow up” because the Seller could not produce sufficient documentation to appease the Buyers attorney.

A well prepared due diligence package also gives the Buyers attorney a sense that the Seller is well organized and has nothing to hide. When a Seller can provide a complete due diligence package to the Buyers attorney, that attorney will be delightfully surprised. It sets the tone for the rest of the transaction which will most likely go very smoothly and close quickly.

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