Due diligence: from one-off analysis to cumulative intelligence
What I wrote in 2017 about the lack of market intelligence in due diligence still holds. But the real issue has shifted: compounding.
In 2017, I wrote an article about the lack of market intelligence in investment processes.
The idea was simple. The tools let you analyze a target's financials very well. They do far less to help you understand its real position in its market.
That still holds.
But with hindsight, I see something more structural than access to information: how that information gets organized, used… and compounded over time.
A due diligence isn't a data problem
Today, a due diligence draws on dozens of documents — pitch decks, data rooms, sector reports — plus expert calls, international benchmarks, internal analyses.
A single one can involve several hundred pages of documentation and dozens of hours of analysis — most of which is barely reused afterward.
The information is already there. The problem isn't its absence. It's its use.
A real cost… for intelligence that's barely capitalized
On a mid-cap deal, external due diligence usually runs between €50K and €200K — roughly 0.5% to 2% of transaction value. On larger deals, it can exceed several hundred thousand euros.
And yet most of that intelligence is barely capitalized once the deal closes.
A well-structured data room can cut advisors' time by 25 to 35% — proof that structuring information hits the quality of the analysis and its cost at the same time.
Intelligence that's still too fragmented
In most cases, each due diligence stays an isolated exercise: you collect, you analyze, you decide, then you start over somewhere else.
This way of working hits a structural limit: the knowledge it produces is hard to reuse.
The insights are usually scattered across slides, locked inside reports, impossible to compare from one project to the next.
We don't lack analysis. We lack memory.
A lack of continuity
And yet part of this intelligence is recurring by nature: market dynamics, competitive structures, customer behavior, weak signals.
The more analysis you produce, the more dispersion you create… if nothing connects it.
Left unstructured, this intelligence is lost. Made collective and organized, it changes how you invest entirely.
A paradox at the heart of private equity
In 2024, more than €126B was invested in private equity in Europe, with one of the highest exit volumes ever recorded. A large share of these transactions were secondary buyouts, where one fund after another holds the same asset.
The same company can go through several heavy due diligence cycles in just a few years. And yet the knowledge built up across those analyses rarely becomes capital you can actually use from one cycle to the next.
The real lever: compounding
What creates an edge today isn't just the ability to analyze an opportunity. It's the ability to build on past analyses, compare them, enrich them over time, and put them to work in new contexts.
Moving from one-off analysis to accumulation.
The investor's job is changing
The investor's role is shifting. It's no longer only about judging an opportunity at a given moment, but about being part of a system that lets you learn from one deal to the next, build a memory, steadily reduce uncertainty.
Conclusion
The innovation market has never been this rich. But when information is everywhere, the edge no longer comes from access to data. It comes from the ability to structure it, use it, and keep it alive over time.
Investing isn't just deciding. It's building an intelligence… that gets better with every decision.