The Fourth Diligence: Will the Value Survive the Deal?
A buyer needs evidence that the people, relationships, knowledge and systems behind current performance can transfer and keep working. GrowFast’s proposed fourth diligence connects those conditions to business value.
Consider a founder who uses AI to prepare proposals, interpret customer requests and build internal tools. The company responds faster. More work moves through the same team. Customers notice the difference.
Now imagine that founder stepping back after a sale. The tools remain, but the questions begin. Which customer requests need special treatment? Why does the pricing workflow exclude certain jobs? Who can recognize an answer that looks convincing but is wrong? The founder has been making those judgments so consistently that the organization scarcely sees them.
This is an illustrative situation, but the transaction question is concrete: what, exactly, will the buyer inherit?
Current performance matters. So do the conditions that make it possible. GrowFast’s proposed fourth diligence brings those conditions into focus through two questions: Can the value transfer? Will it hold?
The connection between performance and continuity
A business can have attractive earnings, loyal customers and useful technology while relying heavily on a few people to keep everything working. Their contribution may sit across functions: an operations manager understands an unusual production constraint; a salesperson knows which customer commitments are negotiable; a founder decides when an automated recommendation should be overridden.
A transition changes the setting in which those contributions occur. People may leave. Authority may move. Systems may be integrated. A customer accustomed to calling the owner may suddenly need to trust someone else.
The practical task is to establish which capabilities support the business’s results, what they depend on and how those dependencies will be managed through the change. That connection helps a buyer understand the operating work behind a value proposition. It also gives a seller a way to make strengths visible before negotiations begin.
What GrowFast means by fourth diligence
Transactions involve different combinations of financial, legal, commercial, operational, technology and other specialist reviews. “Fourth diligence” is GrowFast’s name for a proposed discipline focused on value transfer and continuity, rather than a claim that every deal has exactly three existing workstreams.
Its purpose is to connect findings across those reviews to the business that incoming ownership will have to run. A financial improvement may depend on a workflow whose ownership is unclear. A customer relationship may be commercially attractive but concentrated in one executive. A technology asset may function well while its operating knowledge remains undocumented.
Those findings become more useful when connected: which part of the performance story depends on them, what could change during transition, and what evidence supports continued operation?
Watch: Where GrowFast fits in a deal (1:32) places this work in the context of seller preparation, buyer diligence and ownership.
AI changes the dependencies
AI can help preserve expertise, make information easier to find and enable more people to perform complex work. Used thoughtfully, it can strengthen a handover.
It can also increase the output of a founder without distributing the founder’s judgment. A workflow that produces drafts quickly may still require one person to validate every important result. An internal tool may rely on an individual’s account, undocumented configuration or familiarity with its limitations.
The question therefore extends beyond whether the company uses AI. What work has improved? Who can operate it? What does it cost to maintain? What happens when an input changes or an output is wrong?
A capability becomes more transferable when someone else can operate it, judge its results and handle the exceptions.
Five areas of evidence
GrowFast organizes this inquiry around five Continuity Measures:
- Owner Coverage: whether critical responsibilities have capable coverage beyond the person who currently carries them.
- Account Continuity: whether customer relationships and account knowledge can survive a change in the people managing them.
- Decision/Role Transfer: whether incoming leaders and teams understand their authority, responsibilities and escalation paths.
- Knowledge/Workflow Documentation: whether the knowledge needed to perform important work is accessible and usable.
- AI: Real or Imaginary: whether claimed AI value is demonstrated in operations, with clear ownership and a credible basis for continued performance.
These measures connect people and systems to outcomes. A documented process is useful, for example, when it enables another person to complete the work successfully. A named backup provides stronger coverage when that person has actually performed the responsibility.
From a claim to an operating capability
GrowFast’s evidence ladder moves through four levels: asserted → anecdotal → documented → operationalized.
“A capability becomes more transferable when someone else can operate it, judge its results and handle the exceptions.”
At the asserted level, management says a capability exists. Anecdotal evidence adds a specific example. Documentation records the workflow, responsibilities and results. Operationalized evidence shows that the capability is being used and sustained in the business.
Consider a claim that AI has accelerated quoting. A presentation describes the improvement. A completed job illustrates it. Records then establish how comparable quotes were produced, reviewed and approved. Stronger continuity evidence shows another authorized employee using the process successfully, including when the usual operator is unavailable.
Each step answers a different uncertainty. The goal is to make the claim supportable at the level of importance it carries in the transaction.
A stronger business before and after closing
This work can reveal opportunities as well as vulnerabilities. A seller may discover that a successful method can be shared across teams. A buyer may identify a valuable capability that has never been extended beyond one location. Clearer decision authority may reduce delays. Better coverage may release a founder’s time for growth.
Findings also make transition planning more concrete. Instead of a general commitment to retain knowledge, the parties can identify the capabilities that need coverage, the evidence still missing and the work required to establish continuity.
A transaction transfers ownership on a particular date. The capabilities supporting its value must keep working through that change. The fourth diligence asks the business to show how.
Stephen Murray discusses the relationship between AI value, people and transferability in ACG’s podcast, The Dealmaker’s Guide to Stress Testing AI Value.
Continue the series: AI Can Make a Founder More Productive. Does It Make the Business More Transferable? and From AI Claims to Defensible Business Value.