Reflections from Renewd's Driving Value Series webinar, October 9, 2025.

Whether you're planning to sell your business tomorrow or have no exit on your horizon, the due diligence process offers invaluable lessons that can transform how you operate and grow. In a recent webinar, industry veterans Dan Oswald CEO of Simplified Compliance and Wayne Cooper Executive Chairman of Chief Executive Group shared hard-won insights from their combined decades of buying and selling businesses - and the surprising ways these experiences made them better operators. The session was chaired by Brittany Carter, CEO Columbia Books.

🎥 Watch Now - Driving Value Series - Lessons Learned During Due Diligence that Apply to All Growth Journeys.

From Burden to Breakthrough

"The first few times I went through due diligence as a seller, it was a huge burden and a shock," Wayne admitted. His brother (and business partner) and he found the process disruptive to their operations and deeply uncomfortable. Dan echoed this sentiment: "It's never a fun experience."

Yet both speakers agreed on a crucial point: what buyers want to see in due diligence - a healthy business with clear growth paths and minimal risk - are exactly the things every business owner should want anyway. "It just helps you build a better company, whether you're going to sell or not," Wayne explained.

The Discipline Advantage

The word "discipline" came up repeatedly throughout the conversation, and for good reason. Dan emphasized how each due diligence process taught his team to ask: "What went well and what didn't? What were we asked for that we couldn't easily produce?"

This iterative approach led to critical operational improvements. For example, tracking consent-to-assignment clauses in contracts used to be a manual, laborious process. Now, specialized software makes it immediately accessible - not just for potential buyers, but for day-to-day business operations.

Wayne highlighted how the pressure of due diligence forced his team to create more robust financial reporting systems. "We used to make a lot of decisions by the seat of our pants," he said. "As we've invested more in our finance function and financial reports, that lets us make better decisions too."

Understanding What Really Drives Value

One of the most eye-opening lessons for both speakers was discovering that not all revenue is created equal. Wayne recalled a pivotal moment when a buyer assigned different multiples to different revenue streams: 12-15x for recurring revenue, 8-9x for repeatable but one-off revenue, and 6-7x for traditional media.

"That was kind of a light bulb moment for us," Wayne said. This insight fundamentally changed how they evaluated new product launches. Now, they ask not just about revenue potential, but about the quality and durability of that revenue.

Dan pointed to the shift in language around growth metrics: "Today they're talking about ARR and MRR and your cost of customer acquisition." His team now focuses intensely on monthly recurring revenue (MRR) as a leading indicator - something far more valuable than backward-looking financial statements.

The People Question

Perhaps the most surprising lesson for Wayne was learning that founder involvement could be viewed as a risk. "The first few businesses, we were surprised that it was kind of a negative how involved we were," he explained. Buyers worried: what happens if the founders leave?

This realization pushed both speakers to invest more heavily in building strong leadership teams. "It's a great investment," Wayne noted. "Building out the team not only adds value through their ideas and growth - it was almost like we were forced to bring in great executives, but it helped really accelerate the business."

For financial buyers especially, the quality of the management team is critical. "Financial buyers are backing a management team," Dan emphasized. "If they don't think it's a backable team, they're not going to invest."

The Technology Wake-Up Call

Dan shared a sobering example of tech debt that many business owners will recognize: "I've got a product that is on PL One - Programming Language One. It's held together with duct tape and baling wire at this point, and we can't find anybody to work on it."

In one recent process, a buyer asked for a complete code download to run through proprietary software analyzing code quality and security vulnerabilities. "It was a first in my career," Dan said. "It was a little bit shocking... but the results were really interesting and we could learn from them."

These older systems aren't just due diligence problems, they're often the biggest security vulnerabilities. Dan noted that SOC 2 compliance, once merely a diligence checkbox, is now table stakes for sophisticated enterprise buyers.

The AI Question

Today's buyers lead with AI questions, according to Dan's recent experience with investment bankers. They want to know three things: Where can AI drive efficiencies? Where can it improve customer experience and products? And most critically, where could AI disrupt your business?

"You need to expect the first, second and third question to be about AI," Dan warned. Having a clear story (preferably with third-party validation) about AI opportunities and risks is now essential.

Practical Steps: What To Do Today

Both speakers offered concrete advice for businesses not currently in a sales process:

Build the right dashboards. Wayne emphasized that 80% of due diligence questions focus on understanding business health and momentum - information you should want anyway. "We need better dashboards even to manage our own business," he said. Each department should identify the key metrics that flag problems and highlight opportunities.

Get your house in order systematically. Rather than trying to fix everything at once, Dan suggested tackling improvements incrementally. After each challenging request or gap identified, implement a system to make that information easily accessible going forward.

Talk to advisors early. Wayne recommended engaging investment bankers and exit planners years before a potential sale. "They're smart. They know what buyers are looking for, where the value is, and they'll identify risk factors and give you time to fix those."

Create transparency and alignment. Wayne transformed his approach to employee equity over the years. Rather than keeping potential sales secret, he now broadly shares stock options tied to enterprise value. "It has created the right behaviors," he explained. "People come to us and say, 'We can do X, Y, Z that I think is going to really improve our enterprise value.'"

Consider a board, even if not required. Dan set up a board for accountability from his first acquisition, despite not being required to do so. He recommends diverse boards with specific skill sets addressing your blind spots, and suggests setting terms to make transitions easier as business needs evolve.

The Vulnerability Factor

Perhaps the most honest moment in the webinar came when discussing the discomfort of this process. The due diligence mindset requires vulnerability - exposing areas where you're not tracking information, where systems are outdated, or where you're weaker than you'd like to be.

"It can be a little bit uncomfortable," Brittany acknowledged. "Everything feels wrong the first time through."

But as Dan put it simply: "Running your business like you're going to sell it improves the operations of the business. You adopt best practices that allow you to be ready at all times, and that just makes you a better operator."

The Bottom Line

You don't need to be planning a sale to benefit from thinking like a buyer. The lessons from due diligence - focus on recurring revenue, build strong teams, create robust systems, understand your true drivers of value - apply to every growth journey.

As Wayne concluded: "Focus on enterprise value, whether you're going to sell or not. It's good for the owners and good for key employees. It makes them think about the longer term too. It makes the business more valuable, whether you sell it or not."

The question isn't whether you can afford to adopt this mindset. It's whether you can afford not to.

Key Takeaways:

• Treat due diligence requirements as a roadmap for operational excellence

• Not all revenue is equal - recurring revenue commands premium multiples

• Strong leadership teams are essential, whether selling or not

• Invest in systems and dashboards that provide real-time business visibility

• Address tech debt before it becomes a crisis

• Create alignment through transparency and equity participation

• Engage advisors early to identify blind spots years before a potential exit

🎥 Watch Now - Driving Value Series - Lessons Learned During Due Diligence that Apply to All Growth Journeys.