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The Best Due Diligence Questions Aren’t About the Past. They’re About Repeatability.

Lee McCabe

12 Oct 2025 — 1 min read

It’s easy to get lost in historicals during diligence. Revenue CAGR, EBITDA margins, year-over-year growth. All important, but only part of the story.

In private equity, what really matters is this:

Can this business generate the same (or better) results again, without heroic effort?

That’s why the smartest diligence processes shift focus from what happened to whether it can happen again. And that means asking questions around repeatability and scalability:

Are lead generation channels reliable and cost-effective?
Look at CAC, payback period, and lead source concentration.

Is the sales engine process-driven or people-dependent?
Dig into win rates by rep, pipeline velocity, and quota attainment.

Are margins structurally sound or propped up by one-off deals?
Analyze gross margin variance by product line and vendor dependency.

Is growth supported by systems or stitched together by manual effort?
Assess tech stack utilization, automation percentage, and ops headcount vs. revenue.

The goal of diligence isn’t just to confirm past performance.
It’s to uncover whether the performance is durable.
Because in PE, value is created when you can scale what’s working, without breaking what isn’t.

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