Assess whether management can run this without the founder after a QoE that

SITUATION A live M&A Due Diligence People and Contracts file in a strategic buyer looking at a carve-out from a conglomerate now turns on related-party revenue that disappears at close after a QoE that cannot tie revenue to bank cash. Commercial-diligence partner should state what that extract proves for whether management can run this without the founder.

DECISION Commercial-diligence partner in a strategic buyer looking at a carve-out from a conglomerate must choose Proceed / Reprice / Walk / Hold using related-party revenue that disappears at close after a QoE that cannot tie revenue to bank cash.

HYPOTHESES TO TEST 1. Related-party revenue that disappears at close reads as Proceed once a QoE that cannot tie revenue to bank cash is lined up to the same M&A Due Diligence population. 2. Related-party revenue that disappears at close is closer to Reprice after a QoE that cannot tie revenue to bank cash; Proceed would over-claim this People and Contracts extract. 3. Walk is still live in related-party revenue that disappears at close for commercial-diligence partner in a strategic buyer looking at a carve-out from a conglomerate. 4. Related-party revenue that disappears at close is missing the fact commercial-diligence partner needs after a QoE that cannot tie revenue to bank cash; stop this M&A Due Diligence close.

ANALYSIS REQUIRED 1. Map reps, earnout mechanics, and integration risk a strategic buyer looking at a carve-out from a conglomerate would inherit. 2. Tie quality-of-earnings, working-capital, and contingent items in related-party revenue that disappears at close to management can run this. 3. Name the document commercial-diligence partner still needs before signing. 4. For this M&A Due Diligence People and Contracts file, read related-party revenue that disappears at close against a QoE that cannot tie revenue to bank cash and write the one fact that would move management can run this for commercial-diligence partner.

RECOMMENDATION Choose Proceed / Reprice / Walk / Hold on this M&A Due Diligence / People and Contracts packet (related-party revenue that disappears at close after a QoE that cannot tie revenue to bank cash). The follow-on People and Contracts action is what commercial-diligence partner does next: implement the option, assign an owner, and log the missing fact.

COMMAND RETURNS - Bottom-line M&A Due Diligence option on management can run this, then the evidence in related-party revenue that disappears at close, then the action for commercial-diligence partner - Hypothesis scorecard against related-party revenue that disappears at close: supported / rejected / untestable - What changes management can run this if a QoE that cannot tie revenue to bank cash is later withdrawn - Named option among Proceed, Reprice, Walk and the fact that kills the others