Digital Due Diligence reports offer a clear understanding and targeted recommendations for a company’s digital performance, alignment with future strategy and preparedness for marketplace changes over the next 3-5 years.
These insights and recommendations can be essential to evaluating a company’s current strength, value and growth potential.
When and Where is Digital Due Diligence Needed?
Private Equity Firms considering any company whose business model relies a strategic digital presence or a digital sales funnel would benefit from Digital Due Diligence. This includes the vast majority of products or services aimed at consumers below the age of 50 as, the younger the consumer, the more awareness both originates and is nurtured online.
For potential investments, Digital Due Diligence should be done at the same time as Financial or Legal Diligence with a turn around time of 3-6 weeks. For portfolio companies, Digital Due Diligence can provide insight before any major strategic change whose success relies upon digital growth.
Upon aligning on how the expected deal fits in with current or anticipated investments, deliverables are chosen based upon which elements of the online strategy are relevant. Deliverables are also dependent upon critical time-lines, access to data, access to company systems, level of access to company personnel, etc.
Digital Due Diligence deliverables include some or all of the following:
- Audit for each element of marketing and advertising which contextualize findings by benchmarking against industry standards and competitors.
- Audit on marketing systems and operations which evaluate marketing program efficacy.
- Audit on Customer Acquisition Costs across all platforms.
Risk & Opportunity Reports:
- A road-map report thoroughly illustrating marketplace risks and future pitfalls.
- A road-map report thoroughly illustrating opportunities including revenue upside opportunities and competitive advantages.
- A road-map report evaluating future investment requirements to realize opportunities or improve efficiency.
Depending on the size and scope of the project, pricing can be calculated on an hourly basis or a project basis. Successful and unsuccessful deals are billed differently.