What does due diligence mean?

In everyday life, the meaning of due diligence stands for an exercise in risk mitigation, ie there may be many bad outcomes to be avoided through the action taken, including acting unlawfully. In financial setting, due diligence means an investigation or audit of a potential investment consummated by a prospective buyer.

What should I do during due diligence?

During due diligence, you may repeat a number of steps if new information comes to light: Analysis of the purpose of the project (i.e., if the deal still meets business goals) Analysis of offer price (which may be tweaked based on discovery)

What happens if you don't complete due diligence?

Ideally, you wrap up due diligence and the buyer decides whether to go forward with the purchase. If you don’t complete the process on schedule, you have a couple of options: You can either extend the due diligence period until you complete the process or move on without completing the deal.

How long does due diligence take?

Depending on the acquisition in question, the due diligence process can last 30 to 60 days, though in a more complex business it could take up to 90 days. To shorten the time frame, experts advise being prepared for the process — even before a buyer comes knocking. What Are the Elements of Due Diligence?