[Priyanka Chauhan]

In your experience, which assumptions made during diligence proved to be incorrect?

[Lourdes Felix]

In my experience, one of the most common incorrect assumptions is that historical performance will continue after the transaction closes. Customer relationships, employee retention, supplier arrangements, and management continuity often look stable during due diligence but can change significantly once a transaction is announced. I have also found that integration complexity is frequently underestimated. On paper, systems, processes, and organizational structures may appear compatible, yet the actual effort required to align them can be far greater than anticipated. Due diligence is essential, but some risks only become fully visible during integration. As the saying goes, things are not always as they seem, which is why assumptions should be continuously tested throughout the transaction process.

[Sarah]

I agree that one of the biggest incorrect assumptions is that historical performance will continue after closing. Another assumption that is often challenged during integration is that key employees will remain with the business. In many transactions, the uncertainty created by a change in ownership can lead to unexpected turnover, especially among senior management and high-performing employees. This can affect customer relationships, operational continuity, and the achievement of projected synergies.

I also think buyers sometimes underestimate the complexity of integrating systems, processes, and corporate cultures. These issues may not appear significant during due diligence but can become major challenges post-closing. This highlights why due diligence should not only identify risks but also assess integration readiness and critical dependencies that could impact value creation.

[Shih-Hung Ting]

In venture capital, the assumption that most frequently proves incorrect is confusing early founder-led sales traction with true, repeatable product-market fit. During diligence, investors often extrapolate rapid early ARR growth, assuming that hiring a VP of Sales and expanding the go-to-market team will linearly accelerate revenue. In reality, that initial velocity is usually driven by the founders’ personal network, charisma, and brute-force custom implementations rather than a scalable, self-serve customer demand. Once the commercial function is handed off to standard sales reps, sales cycles abruptly lengthen, customer acquisition costs surge, and retention drops—exposing the fact that the company had great evangelists, not an inherently scalable distribution engine.

[Author]

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