Due Diligence (commercial)
Commercial due diligence doesn't verify whether you've sold enough. It verifies whether you'll keep selling enough after whoever bought you stops watching.
“In due diligence, a figure you can't prove is worth the same as a figure that doesn't exist.”
Otto GTM ObservatoryWhat actually gets scrutinized in your GTM
Whoever conducts commercial due diligence doesn't settle for the declared ARR figure: they ask for the cohort breakdown, concentration on the top 10 customers, 8-12 quarters of churn and NDR history, and the repeatability of the sales process net of the founder's personal relationships.
A company that arrives prepared for this exam already has a structured commercial data room: pipeline dashboards, written MQL/SQL/opportunity definitions, retention cohorts, standardized contracts. Whoever doesn't have this loses precious time exactly when time weighs most on the negotiation.
Anti-patterns
Common mistake: showing up to due diligence with metrics calculated ad hoc for the occasion, without a consistent history demonstrating how they were measured over time, raising doubts about their reliability.
Second mistake: hiding or downplaying customer concentration instead of addressing it openly with an already-underway diversification plan, which demonstrates risk awareness more than the mere absence of the problem.
Practical Application
A company arriving at a Series B round with churn data calculated only for the last two quarters, with no longer history, suffers a 15% valuation discount requested by investors as compensation for unquantifiable risk. A comparable company with 3 years of documented, verifiable NDR/GRR data by cohort closes the same round with no additional discount on the starting valuation.