M&A deal or investment process
Due diligence is a way of checking, investigating, or auditing a potential deal or investment opportunity to confirm all the important facts and financial info and to make sure everything else mentioned during an M&A deal or investment process is legit. This whole due diligence thing is done before the deal wraps up to give the buyer some peace of mind about what they're getting into.
Importance of Due Diligence:
Deals that go through a due diligence process tend to have a better shot at success. It helps in making smarter decisions by improving the quality of info available to those making the calls.
From a buyer's perspective:
When a buyer does due diligence, they can feel confident that their assumptions about the deal aren't off base. In M&A, there's a lot at stake for the buyer if they jump into acquiring a business without completing due diligence.