Top 5 Due Diligence Firms for Online Businesses in 2024

Due diligence is crucial.

An indispensable step in any acquisition. I hate to admit it, but I’ve messed it up myself before and had to learn the hard way.

“Oh I can do that on my own” can be famous last words.

Simply put, the process of assessing the financial, operational, and legal aspects of the company to acquire, as well as analyzing potential risks and opportunities involved in the deal can be tough. Performing due diligence will help both parties minimize risk, avoid costly mistakes, negotiate better terms, and ensure a smoother transition.

The due diligence process is complex and time-consuming, especially for first-time buyers who don’t have the right expertise, tools, and resources to conduct it. That’s why it’s advisable to hire a professional due diligence service that can help you with this task.

But how do you choose the best due diligence service for your needs? 

There are many factors to consider, such as the scope, quality, cost, and reputation of the service. It also helps to know how they approach the due diligence process from the start. To spare you from the overwhelming task of sifting through countless options, I have put together a list of the top five due diligence services, based on my own experience, that excel in securing business acquisitions.

The 5 Best Due Diligence Service Providers

  1. Centurica
  2. Flippa
  3. Durkin Group
  4. Intrinsic, LLC
  5. Marcum LLP

1. Centurica

Centurica is another top-notch due diligence service provider for online businesses. They have been helping savvy investors buy web-based businesses with confidence since 2013. They have a team of experts who have operated their own online businesses and can offer unparalleled insights and advice on the digital marketplace.

If you decide to hire Centurica to perform due diligence, you can expect the following: 

  • The initial deal review, valuation, and offer. Centurica leverages its proprietary database to find comparable offers, ensuring buyers do not overpay for a business. After that, the team provides an initial risk assessment and valuation report, prepares a checklist of due diligence items needed from the seller, and offers assistance with the Letter of Intent through their in-house Mergers & Acquisitions attorney.
  • Financial verification. This stage is about rebuilding the profit and loss (P/L) statement of the target company and verifying the seller’s financials. It also identifies any discrepancies or anomalies that could affect the valuation or profitability of the business.
  • Marketing and operational due diligence. In this part of the background check, the operational aspects of the business, such as traffic, conversions, customers, suppliers, competitors, and risks, are analyzed. It also helps identify any value-creation opportunities or growth potential that the business has.
  • Online business-specific risk analysis boils down to conducting an in-depth analysis of the market and industry in which the business operates and assessing the sustainability and scalability of the business model. Centurica also provides a SWOT analysis and a benchmarking report to compare the business with its competitors.
  • Growth and transition. This stage is designed to help buyers maximize the value of their new business and ensure a smooth transfer process. During advisor meetings, Centurica’s team will help prevent and address any unexpected transfer issues, ensuring that the business continues to perform at or above its current profit levels. There’s also a detailed plan on how the transfer of assets and liabilities will occur, including planning for transferability issues. Centurica’s team will prioritize the top growth and risk reduction opportunities discovered through all phases of the deal and review all training and documentation provided by the seller to ensure it’s comprehensive enough for the buyer to take over operations right away. Before the transfer begins, there’s a final check of any pending due diligence items to ensure that all necessary steps have been taken to mitigate potential risks.
  • Post-closing verification and operations takeover. The purpose of this stage is to help buyers develop a game plan for the first year and connect them with the necessary team and resources for implementation. Their services include bookkeeping, supply chain and freight forwarding, and access to a database of quality contractors. These offerings are designed to ensure financial due diligence, efficient operations, and a smooth transition to the new owner.

Centurica’s due diligence services minimize the risk and uncertainty involved in buying an online business and uncover any hidden value opportunities that the business has. They work with all types of companies. Starting from Ecommerce due diligence, to brick and mortar companies, and everything in between. They can also help you avoid falling for scams or fake financials and ensure that you buy a high-quality and profitable online business. Finally, Centurica does not represent sellers, which is a guarantee that you’ll get an impartial evaluation focused on your best interests.

2. Flippa

Flippa is a leading auction marketplace for buying online businesses, including SaaS assets, apps, ecommerce, blogs, communities, and plugins. They offer due diligence services for buyers who want help in vetting a deal. Flippa’s due diligence service packages include Red Flag, Standard, and Enhanced plans, with varying fees, analysis periods, report sizes, and business sizes.

  • The Red Flag package, priced at $1,500, includes a one-year analysis period. It comes with an 11-14-page report focusing on high-level risks and opportunities for businesses worth less than $30,000. 
  • The Standard package, priced at $2,000, has a two-year analysis period. It comes with a 21-25-page report and detailed risk and opportunity assessment for businesses worth between $30,000 and $200,000. 
  • The Enhanced package, priced at $2,500, offers a three-year analysis period, a 26-35-page report, and an in-depth risk and opportunity assessment. The assessment includes industry trends and comparisons to other businesses based on relevant ratios for businesses worth over $200,000.

Flippa’s due diligence service is essential for buyers, especially for those unfamiliar with the process, as it verifies that an asset is as it is claimed to be.

With the help of their due diligence specialists, you can rest assured that the authenticity and legitimacy of the online business you are purchasing are thoroughly checked so that you can have confidence in your investment decision. They will provide you with the essential information and data so that you can avoid scams and buy a genuine and profitable online business.

3. Durkin Group

Durkin Group specializes in due diligence, field examination, accounting, and auditing for online business acquisitions. With more than 20 years of experience in delivering exceptional customer service to clients across various industries and sectors, Durkin Group is the top choice for many investors, lenders, and mid-market companies looking for potential mergers. 

Their due diligence services include:

  • Financial health assessment. This means reviewing the financial statements, accounting practices, and potential risks of the target company, and providing a detailed report with their findings and recommendations.
  • Operational review. The purpose of this review is to evaluate the operational aspects of the business, such as efficiencies, processes, and areas of improvement, and provide a comprehensive analysis with their insights and suggestions.
  • Compliance and legal checks make sure that the target company complies with all the relevant laws and regulations and verify the legitimacy and validity of the transaction. 

Durkin Group’s due diligence services can help you gain a clear and accurate picture of the financial and operational performance of the target company, and identify any red flags or potential issues that could affect the deal. They can also help you negotiate better terms and conditions, and facilitate a smooth and successful acquisition.

4. Intrinsic, LLC

Intrinsic, LLC is a valuation and financial advisory firm that offers due diligence services for private equity firms and mergers and acquisitions. 

They have a team of certified valuation analysts, financial experts, and industry specialists who can provide objective and independent due diligence services for online businesses. Their due diligence team boasts extensive experience in complex transactions, including buy-side and sell-side financial due diligence projects. This involves scrutinizing the financial and operational data of target companies, ensuring a thorough review of key aspects like quality of earnings, net working capital, and other critical factors.

Intrinsic’s due diligence services include:

  • Risk identification. Intrinsic assists in identifying and assessing potential risks associated with acquisitions, providing buyers with a clear understanding of what they’re getting into and what they can expect.
  • Operational review. By conducting in-depth analyses of operational efficiencies and processes within target companies, their team offers insights into the operational aspects crucial for safe investing.
  • Financial insights. Intrinsic generates comprehensive due diligence reports and presents buyers with key findings and important contract considerations. Such a meticulous approach allows for informed decision-making during business acquisitions.
  • Client communication. Being hyper-responsive is one of Instrinsic’s priorities. Besides responding to clients quickly and often, they also actively engage in meetings with target company personnel and facilitate client communications, ensuring a smooth and transparent due diligence process.

Intrinsic’s due diligence services can help you gain a deeper understanding of the financial, tax, and IT aspects of the target company, and identify any potential issues or opportunities that could impact the deal. They can also help you optimize the transaction structure and terms, and ensure a seamless integration.

5. Marcum LLP

Marcum LLP is a leading full-service accounting and advisory firm specializing in financial due diligence, particularly for tech, digital, and internet businesses. Their industry expertise sets them apart, enabling sellers to achieve optimal asset value. 

Marcum LLP’s due diligence service emphasizes the importance of financial reviews, record analysis, and strategic evaluations during the critical due diligence phase. 

Here are the acquisition services that they offer: 

  • Due diligence services. Marcum LLP provides buy-side and sell-side financial due diligence, IT due diligence, and tax due diligence for domestic and international transactions. This includes assessing the quality of earnings, IT infrastructure, and tax risks to help clients make informed decisions.
  • Post-merger or acquisition services. Their integration services team assists in creating detailed transaction and integration plans to ensure a smooth transition post-merger or acquisition. They focus on retaining key employees and preserving the core business during the integration process.
  • Tax transition services. Marcum LLP offers tax planning, compliance, structuring, and due diligence services. This includes federal, state, and international tax compliance, tax structuring for minimizing tax liabilities, and identifying and mitigating tax risks.
  • Valuation Services. Their valuation services cover business and asset valuation, financial reporting, tax reporting, and litigation support. This involves valuing businesses, intangible assets, and financial instruments for various purposes such as financial reporting, tax planning, and litigation.

Tailored to meet the diverse needs of clients involved in transactions, Marcum LLP’s due diligence, post-merger integration, tax planning, and valuation services, paired with their team’s expertise, add significant value to all the parties involved in the transaction.

Why You Need Comprehensive Due Diligence Services During the Business Acquisition Process 

If you are planning to buy or sell a business, you need to conduct due diligence to ensure that you are making a sound and informed decision. 

In some cases, you can’t see red flags right away. Due diligence consultants will give you detailed insight into the financial health of the business you’re eyeing and bring some hidden liabilities out into the open. This scrutiny of financial records, legal contracts, employee agreements, and customer relationships will help you spot even some subtle discrepancies in reports and potential legal disputes.  

In Closing

These top five due diligence providers stand out for their detailed approach, comprehensive services, and proven track records in facilitating successful online business acquisitions. Their expertise is invaluable in navigating the complexities of the process, ensuring that investors make informed decisions. As you consider your options, remember that the right firm will not only safeguard your investment but also empower your business’s future growth and success.

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