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THE METHODOLOGY
How we run marketing due diligence on an acquisition.
Most diligence processes scrutinize the finances and skip the engine that produces them. Marketing is where a growth forecast is either validated or exposed as hope. This is the 16-point process we work through, top-line economics first, channel detail last, to tell you whether the pipeline in the model is real, and what it will take to hit it after close.
Why marketing belongs in diligence, before the first 100 days
A company that treats marketing as the team that writes emails for sales tends to struggle the moment it needs to scale. It can't generate enough pipeline for the sales plan, or enough awareness to win when a deal comes down to the wire. Those constraints don't show up in a P&L, but they cap the growth the model is priced on.
Assessing marketing before you sign answers three questions the financials can't.
- Is the addressable market big enough to support the growth case?
- Does it cost more to acquire a customer than that customer is worth?
- Are the assumptions in the forecast built on historical performance, or on optimism?
Answer those early and you either price the risk correctly, or you walk away before it costs you. Answer them after close and you're already behind.
The most valuable output of marketing diligence is an honest read on whether the growth in the model is achievable, and, if the deal proceeds, exactly what has to be true in the first hundred days to realize it.
What we assess, the 16 areas
The process moves from the most high-level items to the most granular. We start with a bird's-eye view of the commercial model, then work down into the channels, so we spend our time on what actually drives results, not what's merely visible.
The commercial foundation
Before any channel-level detail, we pressure-test the economics the deal is priced on.
- 1. Revenue model: historical and projected revenue by source, in a cohort-based waterfall where the data allows. Where it doesn't, we work from whatever attribution exists and flag the gap itself as a finding. The test is whether the forecast tracks historical performance or departs from it.
- 2. Product roadmap: read through a marketing lens. Does the positioning on the site and in-market match where the product is actually going? Drift here signals a strategy reset is coming.
- 3. TAM analysis: how large the addressable market is, how much is left to capture, and how share sits versus competitors. TAM also dictates the motion: a smaller market rewards account-based precision; a larger one rewards demand capture at scale.
Funnel and deal economics
This is where a thesis is confirmed or falls apart, because it shows whether the company acquires revenue at a cost the model can carry.
- 4. Funnel metrics: conversion at each stage, win-rate trend over time, and the reasons deals are lost to competitors. A declining win rate is an early warning that the market or the message has moved.
- 5. Deal metrics: ACV, CAC, payback period, and churn segmented by cohort and customer type. The working rule: CAC recovered inside twelve months. Older customers churning faster than new ones arrive is a product or retention problem showing up in marketing's numbers.
Marketing performance today
Only now do we look at what the team is actually doing, and whether the spend produces pipeline or just motion.
- 6. Spend and activities overall: the channels in play, the budget, headcount and roles, and the key programs. The high-level map before the teardown.
- 7. Pipeline contribution: how much pipeline marketing sources versus influences, and how much pipeline is created per dollar of spend. Below a dollar of pipeline for every dollar spent, the engine cannot pay for itself even if every deal closes.
- 8. Channel and campaign performance: the granular read on which channels earn their budget and which the others are paying for, allowing for the ones built to hold awareness rather than capture demand directly.
Where the growth is
Diligence isn't only a verdict on the past. The more valuable output is the map of where pipeline can come from after close.
- 9. Paid media potential: where budget is under- or mis-allocated, which channels have headroom, and which have hit diminishing returns.
- 10. SEO and organic potential: current organic traffic against the search volume available in the category, benchmarked to competitors. At minimum, the company should own the bottom-of-funnel terms that describe what it sells.
- 11. Opportunities to scale: which activities to keep, expand, or cut, and the gaps, weak conversion, thin brand, that cap growth until they're addressed.
- 12. Strategic growth plays: pricing, new segments, partner motions, community. The larger levers a fund can pull that marketing then has to support.
Capability and infrastructure
A plan is only as good as the team and tooling behind it. The honest read on whether the current setup can carry the number.
- 13. Team and org structure: does the team match the go-to-market? Where a restructure or a single key hire unlocks the plan, and where a mismatch will otherwise stall it.
- 14. Technology stack: what's bloated, redundant, or missing. On add-on and platform deals, where consolidating overlapping stacks saves real cost.
The synthesis
Everything resolves into two things a board can act on.
- 15. Financial forecast: rebuilt from the real per-channel CAC and conversion data and the team's actual capacity, then set against the forecast the company provided.
- 16. The whole picture: a single scored view by functional area, so the readout shows at a glance which levers matter most and where the risk sits.
What good looks like, the scorecard
The sixteen areas resolve into one scored summary. It gives an operating partner a fast, defensible read on where the marketing function is strong, where it leaks, and what to fix first, the same view we hand to the investment committee or the portco board.
| Functional area | Score (1-5) | What we're reading |
|---|---|---|
| Paid media | 4 | Spend efficient and trending the right way, with headroom to scale. |
| Content and SEO | 4 | Owns core organic demand; nurture in place but under-built. |
| Website and conversion | 2 | Ranks and gets traffic, but leaks at the visitor-to-lead step. |
| Data and attribution | 5 | Clean tracking across the funnel, the board's questions can be answered. |
| Martech stack | 3 | Functional but aging; needs investment to run the plan. |
| Marketing team | 4 | Capable lead in place who can scale under the right structure. |
Scores are read in context. What counts as strong depends on the company's stage, budget, and go-to-market, which is why this is as much judgment as measurement. The value is in the pattern across the six, because it shows which areas can be scaled and which have to be fixed before anything else moves.
How we gather the data
The most direct route is to ask the target's marketing leader to pull the reports above, and whether they can is itself a finding. A team that can't quickly produce funnel, channel, and attribution data usually isn't measuring the things that grow the business.
When full access isn't available at the diligence stage, we assemble a high-level read from outside the company, competitive and organic-search intelligence, paid-listing and review data, and public signals of demand. It won't match a full data-room teardown, but it's enough to price the risk before the deal closes and to know where to look first once it does.
What you receive
The output is the same two documents the assessment produces, built to be read in a board meeting rather than admired in a deck: a findings document that ties each issue to the revenue it's costing, and a value-creation roadmap that sequences the fixes across the first 90 days and names the engagement model that fits.
Score the six functional areas above yourself, 1 to 5 against what good looks like at the company's stage, in about 10 minutes. Open the portfolio benchmark
Put a target, or a portco, through the process.
Pre-deal as marketing due diligence, or post-close as the 30-day read. Tell us the company and the thesis.