Commercial due diligence and market validation for industrial technology investors.

• About two weeks. A red-flag read on urgency and who signs (Benchmarked).
• About four weeks. Urgency and who signs are Verified. Willingness to pay at a named price reaches Benchmarked.
• About eight weeks. Willingness to pay is Verified. Channel viability reaches Verified once a second round, with the distributors, integrators or marketplace partners the buyers named, fits in the window. Displacement usually stays Benchmarked: stated intent to switch is weaker evidence than a switch.

→ See the specimen scorecard

This is an example, not a commitment. It assumes one segment and warm access. Ten buyer introductions from the deal team or management move each grade about one window sooner; cold access and restrictions on contacting the target's customers move it later.

Illustrative. A live brief cites the scored interviews behind each grade, and says whether they came from the target's customers or from buyers in the same segment.

• The champion holds the budget: Verified. 7 of 10 operations directors in the segment named themselves as approvers at this spend. Evidence: buyers in the segment who are not customers.
• Pilots convert: Benchmarked. 4 of 6 pilot sponsors said the rollout needs a capital approval they do not own. Goes to confirmatory diligence.
• Willingness to pay at list: Benchmarked. Accepted per line; per-site pricing met resistance in 3 of 5 tests.
• The channel will carry it: Assumption. No partner interviews in the window. A price or structure question for the IC.
• Displacement of the incumbent: Benchmarked. Stated intent to switch, not a switch.

An Assumption on a claim the return depends on becomes a price, structure or Stop question before signing. A Benchmarked claim goes on the confirmatory diligence agenda. The claims still open at close become the first tests in the 100-day plan. We recommend a verdict. The investment committee decides.

Bain's 2026 private equity report puts buyout holds at around seven years and estimates that a 2.5x return over five years now needs 10% to 12% annual EBITDA growth, where 5% used to be enough. That growth has to come from buyers who pay, which is the part of the thesis a financial model inherits rather than tests.

A Diligence Sprint runs next to the wider diligence, with its own brief. Thing Company's founder did this diligence from inside an industrial venture capital firm, from seed through Series A. Two of those portfolio companies have since been acquired. He has also sold through each route himself: developer-led, white-label through carriers and device makers, distributor programs with deal registration and market development funds, and direct enterprise sales, and he works today inside a group that is at once an ISV, a reseller, an integrator and a managed services provider. Current roles are disclosed in writing before any engagement they could affect. → Who does the work

Do you do financial due diligence?

No. Financial diligence, including quality of earnings, stays with your accounting advisers. The Diligence Sprint is commercial, with technical diligence in scope where the thesis depends on it. It tests with buyers whether the claims the return depends on hold, at what price and through which route.

Can you interview the target's customers before signing?

Only where the deal terms allow it. Otherwise we interview buyers in the same segment, and the brief states which evidence each grade rests on.

Will the buyers we interview know who is asking?

That is agreed at scoping. Before signing, deal work usually runs without naming your firm.

Will you sign our NDA?

Yes. We sign your NDA before you share anything confidential. The first call can stay on the thesis and the diligence window, with no confidential detail needed.

Do you work for competing firms or companies?

We may. Each engagement is confidential, and nothing from yours is used in work for anyone else. Any relationship with the company being assessed is disclosed in writing first.

How do you test a recurring-revenue thesis in an industrial target?

With the buyers who would sign. We test what share of the installed base would convert, at what price against what they pay for parts and service today, from which budget, and whether they would renew. Many keep the asset and buy only the service by the hour, as airlines, railways and power plants do. A subscription is an operating cost that lowers the customer's EBITDA where a depreciated asset does not, so a conversion thesis gets tested, not assumed.

Will portfolio management see an outside read as a verdict on them?

It separates the premise from the execution. Management supplies the context, the program's history and access to customers, and sees the findings before the board does, so it can correct facts and add context. It does not change the grades. Three of the four verdicts keep the initiative running, and a Stop says the buyers did not behave as the plan assumed, not that the team failed. The board decides.

Why test a growth initiative during the hold rather than at exit?

Because a buyer's diligence at exit will ask the same questions. A claim tested and graded during the hold goes into the data room as evidence; one carried untested is a gap the buyer prices. Early in the hold, a Stop or Pivot also frees capital while a replacement still has time to show results. For AI programs the gap is wide: In S&P Global's 2025 survey, 42% of companies were abandoning most of their AI initiatives, up from 17% in the prior year's survey.

How do you treat channel-led revenue against direct?

Each route is graded on its own evidence: who sourced, closed and services the account, the partner's margin and capacity, and what concentration or territory terms put at risk.

Can commercial diligence fit inside a deal timeline?

Yes, as a Diligence Sprint. The deal process sets the window, so we state before work starts which claims it can grade and to what level, in writing within three working days of the first conversation. In an example with warm access, two weeks gives a Benchmarked read on urgency and who signs, and four weeks Verifies both. The written statement also says what the window cannot show.

How do I diligence the commercial claims of an agentic or physical AI target?

Test them with the buyers who would sign. For agentic AI we score autonomy tolerance, governance readiness, a falsifiable success criterion, and budget architecture and return on investment (ROI) ownership. Physical AI adds the safety and liability model, the sim-to-real gap at the buyer's site and operational continuity. For a deal, these are the technical diligence items the thesis depends on. The agentic AI and physical AI pages set out each one.

What commercial evidence belongs in the 100-day plan?

The claims still open at close. Each becomes a test with the same pass/fail criteria the diligence used, so the board can see within two quarters whether the plan runs on evidence or on momentum. Benchmarked claims set the confirmatory diligence agenda. An Assumption on a claim the return depends on is a price, structure or Stop question, better raised before signing. The paper Fund, fix or stop covers what to do when a test fails.

How do I work alongside the commercial diligence provider we already use?

The buyer-evidence workstream runs next to the provider's work, with a separate brief. The provider's market view defines the segments, and buyer interviews test whether the growth assumed in those segments is supported by buyers with budget and authority. Where the two disagree, the disagreement is a finding worth taking to the investment committee. Expert-network calls teach a market quickly, but they do not show whether this buyer, at this price, will sign.