As a private equity investor, due diligence is the first thing you focus on. But are you considering sales and marketing as you assess this possible portfolio addition?


Sales and marketing can be critical functions in a successful business. Or they can be profit drains if they are not managed properly.


Get an understanding of the company’s ability to grow revenue with sales and marketing. This due diligence will help you avoid nasty surprises after an acquisition.


Getting Ready for Due Diligence: Sample Documents to Request

First things first. Gather the critical documents for review. The underlying question you need to be asking is always:


Is this team/activity/process improving the company’s bottom line?


From demand generation to lead management, sales and marketing activities should be providing ROI.


The following list of documents is a sample of what to look for:


Sales strategy:


  • Corporate strategy
  • Competitive analysis
  • Sales and marketing budget P&L (previous year and current year)


Customer Side:


  • Descriptions of ideal customers (personas)
  • Market analysis and marketing segmentation with TAM (total available market)
  • Customer segmentation analysis (vertical, customer size, opportunities to “go and grow,” white space)


Organization structure:


  • Sales and marketing organization charts
  • Market by region




  • Job descriptions
  • Sales role definitions
  • Pay ranges
  • Hiring competencies
  • Onboarding and training documentation
  • Exit interviews


Account management: Key Account Program


  • Year-over-year growth
  • Key account selection criteria


Demand generation and lead management data:


Documentation that helps you understand what marketing is doing to drive demand


Sales territories, quotas and compensation for sales reps and sales leadership

Sales operations:


  • Reporting and data
  • Customer feedback
  • Documentation of tools, processes and systems that are used to run the business
  • Sales enablement information. This includes new product offerings, training, and content that enables the sale force


Pricing analysis and pricing sensitivity:


Once you have gathered the appropriate documents, it’s time to move on to the 5-step plan.


5-Step Sales and Marketing Due-Diligence Plan


This 5-step plan will help you assess the company’s sales and marketing effectiveness.


  • Sales and marketing effectiveness assessment

Get baseline on the maturity of the company’s sales and marketing teams. Do the teams understand how to identify market opportunities? Can sales and marketing leaders organize their teams around the strategy and execute?


  • Pipeline forecast validation in comparison to current performance

Does the sales team know how to correctly identify potential sales? Can they accurately determine deal size and ability to close? Look at the actual quarterly performance and match it against forecast. Is the current team proactively and intelligently addressing any gaps?


  • Talent assessment

What is the leadership team’s philosophy on talent? How do they source, onboard and retain great talent? What coaching and development plans do the sales leaders have for their teams? How are sales skills evaluated and improved?


  • Sales and marketing cost analysis

What is their cost to acquire a customer? Where is the sales budget and marketing budget being focused?


  • Revenue EBITDA pro-forma

In terms of EBITDA (earnings before interest, taxes, depreciation and amortization), what are the trends? Is the company looking to build on growth? Are they aggressively addressing issues that are stalling top-line revenue growth and eroding profitability?


Getting a Better Look at Your Sales Leaders: The Sales Breakout Meeting

One of the powerful tools you have as an investor is the breakout meeting.


Take a couple of hours for a meeting with the company’s sales leaders. Give them the opportunity to help you understand their sales strategy. Have them explain how they have implemented and actualized the corporate strategy.


For example, if the corporate strategy is product-driven, what is their go-to-market strategy? Do they have a specialized sales force? How sophisticated is their product education?


If corporate strategy is focused on customer intimacy, what is their talent matching system? How do they pick the right people and match them to the right accounts? Are they picking key accounts that support the investment in staffing and support?


Make Savvy Investment Decisions

Uncover any nasty sales and marketing surprises before you invest in a company. As you would with the executive team, perform due diligence with sales and marketing.



Matt Sharrers

Leads the firm's focus on the CEO’s role in accelerating revenue growth by embracing emerging best practices to grow revenue faster than the industry and competitors. 

Matt Sharrers is the CEO of SBI, a management consulting firm specialized in sales and marketing that is dedicated to helping you Make Your Number. Forbes recognizes SBI as one of The Best Management Consulting Firms in 2017.


Over the course of nearly a decade at SBI, Matt Sharrers was an instrumental early partner guiding SBI as the Senior Partner. Matt’s functional responsibilities included acting as the head of sales where he led SBI’s double-digit revenue growth, and was responsible for the hiring function to build SBI’s team of revenue generation experts.


Prior to joining SBI in 2009, Matt spent eleven years leading sales and marketing teams as a Vice President of Sales. Matt has “lived in the field.” As a result, he is the foremost expert in the art of separating fact from fiction as it relates to revenue growth best practices. CEOs and Private equity investors turn to Matt’s team at SBI when they need to unlock trapped growth inside of their companies.



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