Layer8 Tech Group Due Diligence Assessment — Product Overview

Layer8 Due Diligence Assessment

Know What You’re Buying
Before You Buy It

AI-powered acquisition risk assessment for buyers, investors, and M&A advisors

Most buyers discover material risks during diligence — after they’ve committed to a price and signed an LOI. The Layer8 Due Diligence Assessment surfaces those risks before you commit, giving you the information you need to structure a better deal or walk away cleanly.

What buyers miss before they sign

The gap between what sellers represent and what buyers find in diligence is where acquisition value is lost — or where deals fall apart entirely.

67%
of SMB acquisitions experience post-LOI price reductions
Due to diligence findings that were not surfaced before the letter of intent was signed.
4–6 mo
added to deal timelines
When material gaps surface after the LOI is signed, deals stall for months while buyers, sellers, and counsel negotiate around the findings.
$280K
average post-LOI price reduction
When operational risk is not assessed pre-commitment, buyers negotiate from a position of surprise, not preparation.

Eight domains. Every acquisition risk.

Scored from the buyer’s perspective — high scores indicate risk, not readiness

The assessment evaluates all eight domains on a 1–10 risk scale. A score of 3/10 is good (low risk). A score of 8/10 requires your board’s attention before you proceed.

📈
Financial Quality
QofE defensibility, add-back documentation, revenue recognition consistency, normalized EBITDA reliability
⚖️
Legal & Liability Risk
Open litigation, IP ownership clarity, contract assignment risk, regulatory compliance, employment law exposure
⚙️
Operational Risk
Key person dependency, process documentation, supply chain concentration, systems fragility, business continuity
👥
Customer & Revenue Risk
Customer concentration, churn rate, contract transferability, pipeline quality, revenue predictability
🖥️
Technology & Cyber Risk
Cybersecurity posture, technical debt, data integrity, systems ownership, prior breach history
👨‍👫
Management & Culture Risk
Management team depth, key employee retention risk, cultural integration complexity, incentive alignment
🏆
Market & Competitive Position
Competitive moat defensibility, market share trend, pricing power, sustainable growth trajectory
🔗
Integration Complexity
Systems integration difficulty, process harmonization, people integration, regulatory requirements

Weighted for how you actually buy

Domain weights shift based on your buyer type — a PE firm and an SBA buyer care about very different risks

🏦
PE / Institutional
Platform & add-on acquisitions
Platform acquisitions and add-ons. Weighted toward management depth, financial quality, and integration complexity. PE buyers need a scalable platform — key person dependency is a fundamental value risk that cannot be fixed post-close without cost.
▲ Financial Quality  ·  Management & Culture  ·  Operational Risk
🤝
Strategic Acquirer
Market expansion & capability
Market expansion, capability acquisition, and customer base consolidation. Weighted toward customer & revenue risk and market position. Strategic buyers need the relationships and market position to transfer — and the systems to integrate efficiently.
▲ Customer & Revenue  ·  Legal & Liability  ·  Market Position
👤
SBA / Individual Buyer
Owner-operator transition
Owner-operated business acquisition with personal loan guarantee. Weighted heavily toward financial quality and operational risk. SBA buyers are personally guaranteeing the loan — the business must be able to run without the current owner from day one.
▲ Financial Quality  ·  Operational Risk  ·  Customer & Revenue

How it works

01
Intake

Submit basic company information, your buyer persona, and whatever documents you have. The assessment can begin with a CIM and basic financials — no full data room required. Select your buyer type (PE, Strategic, or SBA) to calibrate the risk weights for your specific acquisition thesis.

⏱  10 minutes
02
Data Gathering Guide

Within 24 hours, receive a targeted guide showing exactly what documents to request and what questions to ask the seller — specific to your buyer type and the target’s vertical. This Stage 2 deliverable gives you the right questions to take into your next seller conversation, and the red flag indicators to watch for in their answers.

⏱  Delivered within 24 hours
03
Full Assessment Report

Submit additional documents and seller responses. Layer8 delivers a scored risk register across all eight domains, deal structure recommendations (price adjustment, escrow holdback with release conditions, reps and warranties, earnout structure if warranted, walk conditions if any domain exceeds critical thresholds), and a 30/60/90/180-day post-close integration playbook with cost estimates and ROI framing.

⏱  48–72 hours after documents received

Four deliverables in every report

📊 Risk Register

Scored assessment across all eight domains with risk level badges (LOW / MODERATE / HIGH RISK / CRITICAL), individual criterion findings drawn from submitted documents, and deal structure implications per finding. See exactly which criteria are driving risk and why.

📄 Deal Structure Recommendations

Synthesized guidance on price adjustment with per-domain rationale, escrow holdback amount and domain-specific release conditions, enhanced reps and warranties, earnout structure if triggered by financial or customer risk, conditions precedent, and explicit walk conditions if any domain exceeds critical thresholds.

📆 Post-Close Integration Playbook

A 30/60/90/180-day action plan for after close — tied directly to the risks identified in the assessment. Includes cost estimates, ROI framing, and Layer8 service mapping for each initiative. Persona-specific: PE buyers get MIP and KPI dashboard initiatives; SBA buyers get day-one checklists and lender reporting setup.

📋 Data Gathering Guide

Delivered at Stage 2 — before the full assessment — so you can go back to the seller with the right questions before you commit to an LOI. Persona-aware and vertical-specific. Includes document request priority tiers (CRITICAL / STANDARD / COMPREHENSIVE) and red flag indicators for each seller question.

Choose your level of support

STANDARD
Self-Serve Assessment
Submit documents via our intake form. Receive your Data Gathering Guide within 24 hours and your full report within 48–72 hours of document submission. The AI-assisted scoring covers all eight domains with evidence-based findings from your documents.
Includes
Risk Register  ·  Deal Structure Recommendations  ·  Integration Playbook
Start Assessment →
ENHANCED
Voice-Assisted Intake
A Layer8 AI voice agent walks you through the buyer intake and helps structure your Data Gathering Guide questions. Ideal for buyers who want to talk through the deal before committing to a full written assessment.
Includes
Everything in Standard + structured voice intake session
Schedule Voice Intake →
PREMIUM
Managed Seller Interview
A Layer8 advisor conducts the seller interview on your behalf — asking the right questions and flagging evasive responses you might miss. Includes evasion analysis and a full interview transcript with red flag annotations.
Includes
Everything in Enhanced + Layer8-conducted seller interview + transcript and red flag analysis
Contact Layer8 →

Browse the demo portfolio

Explore 12 real acquisition target assessments across multiple verticals and buyer personas. See how the same company looks through different buyer lenses — and compare with the seller-side Exit Readiness portfolio at exit-readiness.layer8techgroup.com.

The same company. Two perspectives.

Layer8 offers both the Exit Readiness Assessment for sellers and the Due Diligence Assessment for buyers. When both sides of a transaction use Layer8, brokers get a complete picture of every deal — and Layer8 sits at the center of the transaction.

Exit Readiness Assessment Due Diligence Assessment
For Sellers preparing their business for sale Buyers evaluating an acquisition target
Score meaning High score = more ready, more valuable High score = higher risk to buyer
Primary output Value Recovery Roadmap, valuation uplift estimate Risk Register, Deal Structure Recommendations
Domains 7 (readiness-focused) 8 (risk-focused, adds Integration Complexity)
Calibration Industry vertical × tier Buyer persona × vertical
Demo exit-readiness.layer8techgroup.com due-diligence.layer8techgroup.com