---
title: "What Is Due Diligence? Private Equity Glossary | Capstreet"
description: "Due diligence is the buyer's detailed check of a company's finances, operations, legal matters and customers before the deal closes."
url: https://capstreet.multisites.ai/glossary/due-diligence
publisher: Capstreet
phone: +1-713-332-2700
contact: https://capstreet.multisites.ai/contact
---

Process

# Due Diligence

Due diligence is the buyer's detailed check of a company's finances, operations, legal matters and customers before the deal closes.

Due diligence is the period when a buyer verifies what you told them. Accountants, lawyers and the buyer's team review financial records, contracts, customers, employees, systems and legal matters.

For example, a buyer asks for three years of financials, top customer contracts and employee agreements. The team confirms each item, then reports any problems. A finding may lead to a price change or a new deal term.

Diligence matters because it is where deals change. Missing documents, messy books or surprise liabilities can lower price or end talks. Owners who prepare early move faster and keep more control.

Most sellers use a [data room](https://capstreet.multisites.ai/glossary/data-room) to share files in an organized way. A [quality of earnings](https://capstreet.multisites.ai/glossary/quality-of-earnings) report often forms part of the work. Use the [due diligence checklist for owners](https://capstreet.multisites.ai/guides/due-diligence-checklist-for-owners) to get ready before the buyer asks.

[Read nextThe due diligence checklist for owners selling to private equity](https://capstreet.multisites.ai/guides/due-diligence-checklist-for-owners)

## Related terms

-   [Data Room](https://capstreet.multisites.ai/glossary/data-room)
-   [Quality of Earnings](https://capstreet.multisites.ai/glossary/quality-of-earnings)
-   [Letter of Intent](https://capstreet.multisites.ai/glossary/letter-of-intent)

## Ready to get started? Let’s talk.

Tell us about your company and what you want next. Conversations are private, and there is no obligation.

[Start a conversation](https://capstreet.multisites.ai/contact)

[(713) 332-2700](tel:+1-713-332-2700)[connect@capstreet.com](mailto:connect@capstreet.com)

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