In Douglas Adams’ 𝘏𝘪𝘵𝘤𝘩𝘩𝘪𝘬𝘦𝘳’𝘴 𝘎𝘶𝘪𝘥𝘦 𝘵𝘰 𝘵𝘩𝘦 𝘎𝘢𝘭𝘢𝘹𝘺, a supercomputer named Deep Thought spent 7.5 million years computing the Answer to the Ultimate Question of Life, the Universe, and Everything. The answer? 42. The problem? Nobody had bothered to figure out the right question. (See: https://tinyurl.com/92wrsyc2)

The same thing happens in M&A due diligence every day.

Buyers who’ve done more than one deal tend to develop a “standard” diligence request list they recycle across every transaction. These lists skew functional and operational: 𝘞𝘩𝘢𝘵 𝘏𝘙𝘐𝘚 𝘢𝘳𝘦 𝘺𝘰𝘶 𝘶𝘴𝘪𝘯𝘨? 𝘈𝘳𝘦 𝘺𝘰𝘶 𝘰𝘯 𝘔𝘚365 𝘰𝘳 𝘰𝘯-𝘱𝘳𝘦𝘮𝘪𝘴𝘦? 𝘞𝘩𝘢𝘵’𝘴 𝘺𝘰𝘶𝘳 𝘌𝘙𝘗?

The result? Mountains of documents, very little insight. Harvard Business Review estimates that 70–90% of acquisitions fail to create value — and confirmation bias in the diligence process is a leading culprit. If you want meaningful answers, you need to ask meaningful questions.

Here are seven ways to do that.

1. Ask “Why,” Not Just “What” — and Explore, Don’t Just Confirm

There’s a difference between “What’s your customer churn rate?” and “Why do customers leave, and what have you tried to fix it?” The first gets you a number. The second gets you understanding — and understanding reveals risk.

Most buyers over-index on confirmatory diligence: checking boxes that support the thesis while missing risks hiding in plain sight. Build in open-ended questions designed to surface surprises: 𝘞𝘩𝘢𝘵 𝘬𝘦𝘦𝘱𝘴 𝘺𝘰𝘶 𝘶𝘱 𝘢𝘵 𝘯𝘪𝘨𝘩𝘵? or 𝘞𝘩𝘢𝘵 𝘸𝘰𝘶𝘭𝘥 𝘺𝘰𝘶 𝘥𝘰 𝘥𝘪𝘧𝘧𝘦𝘳𝘦𝘯𝘵𝘭𝘺 𝘪𝘧 𝘺𝘰𝘶 𝘤𝘰𝘶𝘭𝘥 𝘴𝘵𝘢𝘳𝘵 𝘰𝘷𝘦r? The “what” gets you data. The “why” gets you deal intelligence.

2. Categorize Questions by Purpose, Not Just Function

Most diligence is organized by workstream — financial, operational, legal, HR, IT. That’s necessary, but not sufficient. Layer in a second dimension: what is each question actually intended to accomplish?

𝗗𝗲𝗮𝗹 𝘃𝗮𝗹𝘂𝗲 → Validates or challenges your investment thesis and purchase price

𝗥𝗲𝗱 𝗳𝗹𝗮𝗴𝘀 → Surfaces risks that could kill the deal or require structural protection

𝗜𝗻𝘁𝗲𝗴𝗿𝗮𝘁𝗶𝗼𝗻 → Won’t change your bid, but shapes Day 1 readiness

This framework forces intentionality. When time is short — and in the mid-market, where diligence windows often compress to three to four weeks — it helps you focus on the questions that actually move the needle.

3. Prioritize Ruthlessly to Avoid Seller Fatigue

Sellers — especially owner-operators — have day jobs. Dropping a 400-question diligence request on Day 1 creates friction, delays, and resentment. Front-load questions tied to deal value and red flags. Stage integration questions for later phases. A disciplined, phased approach signals that you’re a serious, organized buyer — and keeps sellers engaged through what can be a long process.

4. Treat Management Meetings Like the Scarce Resource They Are

You get limited face time with the CEO, CFO, and key operators. Don’t waste it on questions the data room can answer. Show up with a written agenda and targeted questions that require judgment, context, or explanation. Use meetings to probe the “soft” risks — culture, key-person dependency, customer concentration, management’s candor. The goal: leave every session with at least one insight you couldn’t have gotten from documents alone.

5. Verify, Then Trust

Initial responses are often rehearsed, incomplete, or optimistic. Real insight comes from the second and third pass. Build in time to circle back: 𝘏𝘦𝘭𝘱 𝘮𝘦 𝘶𝘯𝘥𝘦𝘳𝘴𝘵𝘢𝘯𝘥… or 𝘞𝘢𝘭𝘬 𝘮𝘦 𝘵𝘩𝘳𝘰𝘶𝘨𝘩 𝘢𝘯 𝘦𝘹𝘢𝘮𝘱𝘭𝘦…

Then cross-reference what you hear against data room documents, financial records, customer references, and third-party research. When stories don’t match, dig deeper. Inconsistencies aren’t always red flags — but they always warrant explanation. The best diligence treats every answer as a hypothesis to be tested, not a fact to be filed.

6. Pressure-Test the “Could Be,” Not Just the “As-Is”

Sellers present projections. Your job is to stress-test the assumptions behind them. Ask: 𝘞𝘩𝘢𝘵 𝘩𝘢𝘴 𝘵𝘰 𝘨𝘰 𝘳𝘪𝘨𝘩𝘵 𝘧𝘰𝘳 𝘵𝘩𝘪𝘴 𝘧𝘰𝘳𝘦𝘤𝘢𝘴𝘵 𝘵𝘰 𝘩𝘢𝘱𝘱𝘦𝘯? and 𝘞𝘩𝘢𝘵’𝘴 𝘵𝘩𝘦 𝘣𝘪𝘨𝘨𝘦𝘴𝘵 𝘳𝘪𝘴𝘬 𝘵𝘰 𝘩𝘪𝘵𝘵𝘪𝘯𝘨 𝘵𝘩𝘦𝘴𝘦 𝘯𝘶𝘮𝘣𝘦𝘳𝘴?

Dig into planned initiatives — new products, pricing changes, geographic expansion — and challenge the timeline, cost, and probability assumptions behind each one. As Harvard Law’s corporate governance forum has noted, directors and buyers alike should question whether growth projections reflect actual performance trends or wishful thinking. This is where deal experience matters most: knowing which assumptions are reasonable, which are aggressive, and which break deals.

7. Understand Why They’re Selling

Seller motivation shapes everything — timeline pressure, willingness to negotiate reps and warranties, and how forthcoming they’ll be throughout the process. Ask directly, and read between the lines. A retiring founder and a PE sponsor in year seven of a five-year hold have very different incentives — and that difference changes how you structure, negotiate, and close.

The Bottom Line

The supercomputer wasn’t the problem — the question was. Better questions lead to better answers, better deal structures, and fewer post-close surprises. Diligence isn’t about collecting documents. It’s about understanding the business well enough to make a confident decision.

Whether you’re buying your first business or preparing to sell the one you built, the right questions — asked at the right time — change outcomes. That’s what we help our clients do.

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Edgar Vargas-Castaneda
Director of Transaction Advisory Services
abip CPAs & Advisors