Due Diligence interview questions

A process question for junior private credit analysts.

Walk me through the basic diligence you would do before committing to a mezzanine investment.

A foundational diligence exercise for a VC analyst or associate.

You have a 30-minute reference call with a startup's customer. How do you structure it, and which answers would concern you?

Tests whether a junior investor can gather evidence rather than accidentally sell the founder's story back to a customer.

You are speaking with a potential customer of a startup that automates invoice processing. What would you ask to test whether the pain is real?

A first-round fund-document question at a secondaries investor.

An LP has agreed to sell you an interest in a private equity fund. Why do you need to read the transfer provisions and obtain the GP's consent before treating the purchase as complete?

A staffer asks an analyst to prepare a lender presentation after a sponsor announces an acquisition.

You are preparing the first lender presentation for a sponsor-backed acquisition. What do you need to validate before marketing the financing, and what would you put in the materials?

A practical diligence test for an associate expected to turn customer conversations into an investment view.

You have five customer reference calls for a growth equity diligence. How do you select the customers and what do you need to learn?

Junior lenders ask this because their recovery can depend on sponsor behaviour before formal default.

You are lending behind senior debt in a sponsor-owned company. How do you assess whether the sponsor will support the credit if performance weakens?

Tests whether a candidate can distinguish true product-led expansion from a flattering customer story.

A company says it has a land-and-expand sales motion: customers start with a small team and later buy enterprise-wide licences. What evidence would you require before believing it?

A deal-team workflow question for analysts expected to turn an approved junior-capital commitment into a protected funded position.

Your investment committee approves a mezzanine commitment for a sponsor acquisition. Walk through the closing work you would complete between approval and funding.

A live-deal case that tests whether an analyst can triage issues rather than produce an unranked diligence list.

You have three weeks left in diligence. Revenue is concentrated in two customers, EBITDA contains large adjustments, and the target's core software is built on a third-party licence. How would you prioritise the work?

Tests how an acquisitions analyst directs limited diligence time before a bid deadline.

A seller gives you three weeks before a best-and-final bid on an industrial property. How would you prioritise diligence, and what findings could change your price immediately?

A diligence question that distinguishes a real retention analysis from a blended KPI recital.

Management says retention is strong because company-wide NRR is 112%. How would you diligence that claim?

Portfolio associates are often asked to pressure-test hiring plans before a board meeting.

A Series B company plans to double headcount in the next year. How do you evaluate whether that is sensible?

A deal-team workflow question for an analyst asked to turn an early indication of interest into an efficient diligence plan.

Your company has signed an NDA for a potential acquisition and receives access to a virtual data room. How would you structure the first request list and manage it so that it helps a decision rather than overwhelms the…

Tests how you'd actually run a workstream as an associate.

You have three weeks of exclusivity on a mid-market manufacturing business. Structure your commercial diligence. What are the three questions you must answer before the investment committee?

A GP-led diligence question at secondaries funds.

Which terms tell you whether a GP is aligned in a continuation vehicle?

A growth-investing case asks the analyst to decide whether management's pipeline and revenue dashboards can support an investment-committee forecast.

Management says it can add $18m of new ARR next year and provides a CRM export showing $54m of pipeline. Outline the workflow you would use to decide whether the pipeline supports the plan.

A take-home style task for analysts supporting a seed investment committee memo.

You complete five customer calls. Two love the product, two say it is useful but non-essential, and one stopped using it after a month. How would you turn that into a recommendation rather than a list of quotes?

Growth investors frequently see concentration hidden inside impressive enterprise ARR growth.

A company has $25m of ARR and its largest customer contributes $7m. The customer has a two-year contract but can terminate for material service failures. How do you underwrite the risk?

A technology coverage analyst may be asked to prepare a rapid diligence plan when a client cites strong product usage ahead of an earnings update or sale process.

A collaboration-software company reports 45% growth in monthly active users but only 8% revenue growth, versus 25% revenue growth last year. You have one day before a management call. What would you test, and how would…

A portfolio-platform case asks you to create value through a customer introduction without substituting a warm email for real go-to-market work.

A Series A security startup asks its VC for introductions to enterprise customers. Build the workflow for deciding whom to introduce and how you would measure whether the support was useful.

Asked in regulated-industry corp dev interviews to test awareness of conduct risk during the gap between signing and closing.

Why might an acquirer use a clean team between signing and closing? What information can it analyse, and what must the buyer avoid doing before close?

Leveraged finance and private credit interviews go deep here.

Explain the difference between maintenance and incurrence covenants. What does "covenant-lite" mean, and why should a lender care?

A final-round judgement question testing whether you can reject a polished growth narrative when cohort evidence weakens it.

A vertical-software company trades at 7x forward revenue and reports 108% net revenue retention. It also gives customers a 12-month implementation holiday, has doubled sales commissions capitalised on the balance sheet,…

A VC portfolio-diligence case where an associate must use scarce founder and finance-team access to decide whether a bridge round funds a financeable business.

You are diligencing a proposed $12m Series A bridge for RelayOps, a workflow-software portfolio company. The investment committee meets tomorrow, management can answer only a limited number of questions, and the company…

An offer-level judgement question about incentives during a stressed portfolio-company situation.

A sponsor-backed borrower needs $15m of liquidity. The sponsor says it has reserves but wants lenders to fund a super-senior delayed-draw tranche first. How would you evaluate the request?

A growth-equity associate diligence exercise before an investment committee recommendation.

You are diligencing a vertical-software company for a growth-equity investment. The CIM, management model and raw billing export tell subtly different stories about recurring revenue, retention and concentration.…

A judgement-heavy diligence question for businesses whose valuation relies on long-term margin expansion.

A growth company says it has pricing power. How would you test whether that is true before underwriting margin expansion?

A source-reconciliation exercise testing whether the candidate trusts evidence by quality rather than convenience.

A software target claims accelerating growth and 118% net retention. Reconcile the CIM, operating model, billing export and customer interviews before recommending whether to proceed.

A coverage-team diligence question after an industrial equipment issuer discloses a potential safety defect shortly before earnings.

A manufacturer of lifting equipment identifies a possible defect in 40,000 units. Management estimates a $30m warranty reserve, but it has not determined the repair rate, customer downtime cost or whether regulators will…

A growth-equity associate live case testing whether the investment view changes when customer data contradicts management's headline metrics.

You are preparing a final investment-committee recommendation for a minority investment in a vertical SaaS company. Work through new evidence as it arrives, make a decision at each checkpoint, then write the final…

Every buyout runs one, and associates are expected to interrogate it.

A seller presents $50m of "Adjusted EBITDA". What does a quality of earnings analysis look for, and which addbacks would you challenge?

A final-round diligence judgement case: decide whether the reported traction supports a seed investment before signing a term sheet.

A B2B software startup reports $1.2m of ARR, up 150% year over year, and is raising a seed extension. You learn that one customer contributes 55% of ARR, all contracts contain 90-day termination rights, and 40% of…

A FIG superday tests whether you can challenge a management presentation that reports strong AUM growth but weak underlying client demand.

An active asset manager reports AUM up 12% year over year, calls it evidence of strong demand, and is seeking a premium valuation. Your work shows market appreciation contributed 15%, net client flows were negative 3%,…

A growth-stage diligence simulation where asking low-value questions consumes scarce meeting time.

A vertical-software company reports 125% net retention and asks for a $600m valuation. You have only three management questions and three customer-reference questions. Spend them on evidence that can change the decision.