10 Best Due Diligence Software (2023)

Due diligence involves thoroughly investigating and assessing a potential business deal or investment. Traditionally a manual process, today technology enables automating due diligence for greater efficiency, insight, and risk reduction. The best due diligence software centralizes document management, questionnaires, research, analysis tools, and collaboration to streamline validating an opportunity.

This post explores 10 leading due diligence solutions based on features, configurability, ease of use, collaboration capabilities, and effectiveness supporting accurate due diligence. Any organizations performing M&A, private equity, real estate transactions, or other ventures can utilize these tools to enhance decision making during deals.

What are the tools used for due diligence?

Here is a table summarizing the pros and cons of the top 10 due diligence software solutions:

Software	Pros	Cons
Merrill DatasiteOne	Robust features; AI-assisted; highly configurable	Expensive for smaller deals
EY Vantage	Aggregation and analytics power; expert services	High-touch managed service
Kroll OnTrack Firmex VDR	Intuitive interface; affordable pricing; integrations	Lacks AI capabilities
Essilor Vision-RTM	Purpose-built for optical sector	Narrow industry focus
Deutsche Bank VDR	AI insights; quantitative analysis; custom branding	Requires Deutsche Bank relationship
IntraLinks VIA	Integrated platform; collaboration; services	Can get costly for smaller deals
Brightflag Due Diligence	Specialized focus; simplified workflows	Limited features beyond questionnaires
MergerWare	Streamlined workflows; permissions; cost-effective	Light reporting and analytics
CosmoLex Due Diligence	Affordable; structured forms and reminders	Overall limited capabilities
DiligenceEngine	AI-accelerated; expert services; ecosystem connectivity	High-touch managed service

Merrill DatasiteOne

DatasiteOne from Merrill provides a complete virtual data room solution tailored for M&A and private equity due diligence. Users can centralize documents, financial models, transcripts, and multimedia while controlling access. Built-in redaction and watermarking protect sensitive materials. Q&A features facilitate due diligence questionnaires and manage inquiries.

Real-time analytics offer insights into buyer behavior. Robust searching and metadata aids organizing and finding details rapidly. Built-in AI helps surface risks and patterns. DatasiteOne enables smooth due diligence across parties, improving deal confidence and positioning at closing.

EY Vantage

Vantage from EY delivers data aggregation, analysis, and collaboration tools purpose-built for due diligence. Automated ingestion and extraction tools centralize documents from email, file shares, archives, and systems. AI identifies critical items for review.

Custom dashboard views provide real-time process visibility. Annotation and versioning enable secure collaboration. EY also provides services for scoping, planning, and executing due diligence powered by the Vantage platform. For Fortune 500 due diligence needs, EY Vantage provides robust technology plus high-touch guidance.

Kroll OnTrack Firmex VDR

Firmex VDR by Kroll OnTrack enables centralized storage, review, and collaboration during due diligence. Indexing and OCR make unstructured documents text-searchable. AI categorizes documents into types using examples. Redaction protects confidential data.

Customized permission controls manage internal and external user access. Dashboards and notifications keep stakeholders aligned throughout. Firmex readily integrates with other systems involved in deals. For affordable yet fully-featured virtual data rooms, Firmex VDR provides excellent due diligence enablement.

Essilor Vision-RTM

Vision-RTM by Essilor offers an enterprise due diligence and valuation platform tailored for the optical industry. The solution centralizes documents, financials, inventory, real estate, and operational data specific to optical practices and retail. Calculators automatically run valuations on inputs.

Custom questionnaires facilitate due diligence review. Cloud-based access and collaboration streamline assessing opportunities with remote teams. For due diligence of optical sector targets, Vision-RTM provides tailored automation and expertise to aid successful deals.

Deutsche Bank Virtual Data Room

Deutsche Bank offers robust virtual data room technology enabling streamlined due diligence during transactions. Users can organize documents with access controls, OCR, annotations, and audit trails for transparency. AI automatically surfaces similar previous transactions to inform diligence.

Custom branding options promote confidentiality. Quantitative and qualitative analysis tools provide actionable insights. Due diligence support services assist executing deals. For financial services sector transactions, Deutsche Bank provides a secure due diligence data environment.

IntraLinks VIA

IntraLinks VIA provides intuitive due diligence software combining a virtual data room with integrated analytics. Users manage documents and Q&A from a single intuitive portal. AI extracts critical details and risks from unstructured data for review.

Built-in collaboration supports threaded discussion, annotations, and activity tracking. Customizable dashboards and reporting provide process visibility. IntraLinks also offers expert services like paper redaction, Q&A creation, and virtual onboarding. For straightforward end-to-end due diligence enablement, VIA delivers.

Brightflag Due Diligence

Brightflag offers a dedicated SaaS solution for streamlining legal due diligence workflows. Users can create custom question sets and distribute to parties in a simple portal. Email reminders and status notifications keep questionnaires moving.

In-app and Excel analysis of responses quickly identifies red flags. File sharing with version histories retains document integrity. Task management, timers, and notes enable organized diligence. For efficient yet affordable due diligence automation, Brightflag provides excellent specialized software.

MergerWare

MergerWare provides a cost-effective due diligence management platform for middle-market M&A deals. Investors can centralize documents, organize diligence tasks, and collaborate on review – fully virtually. Customization supports unique deal processes and forms.

Permission controls enable ethical walls between involved parties. Effective indexing, search, and reporting reduce data review time. Chat, annotations, and alerts drive engagement and organization. For focused due diligence workflow improvement, MergerWare delivers huge value.

CosmoLex Due Diligence

CosmoLex offers dedicated legal tech tools for streamlining due diligence using checklists, document management, and collaboration features. Custom digital forms standardize gathering data while allowing freeform input.

Automatic reminders ensure questionnaires get completed. Central repositories make documents accessible to the right users. Task assignment, built-in chat, and annotation coordinate due diligence execution. Though not as full-featured as some systems, CosmoLex provides affordable due diligence automation.

DiligenceEngine

DiligenceEngine provides intelligent software and services to accelerate due diligence for investments and other strategic transactions. The platform centralizes documents, transcirpts, and models while enabling collaboration across parties. Machine learning extracts and highlights critical details to focus reviews.

Experts tailor processes leveraging built-in best practices while still allowing customization. Portfolio analytics deliver insights across deals. For AI-powered due diligence acceleration, DiligenceEngine combines purpose-built technology with specialized services.

FAQs

What is due diligence software? Due diligence software refers to technology solutions and tools that help organizations and individuals conduct thorough and systematic investigations or assessments of potential business opportunities, investments, partnerships, or acquisitions. It streamlines the process of gathering, analyzing, and organizing relevant information to make informed decisions.

Which company is best for due diligence? The choice of a due diligence service provider or software company depends on your specific needs and the nature of the due diligence you require. Some reputable companies known for their due diligence services include Deloitte, PwC, KPMG, and Ernst & Young (the “Big Four” accounting firms). However, smaller, specialized firms and software providers may also excel in certain areas of due diligence.

What are the tools used for due diligence? Tools used for due diligence may include data analytics software, document management systems, financial analysis software, background check services, and project management tools. Some specific tools commonly used in due diligence processes include Microsoft Excel, data visualization software (e.g., Tableau), document review platforms (e.g., Relativity), and various research databases.

How to do due diligence on a software company? Due diligence on a software company involves assessing its financial health, technology stack, intellectual property, customer contracts, compliance with regulations, and more. The process typically includes financial analysis, technical assessments, legal reviews, customer interviews, and market research. It’s essential to engage experts in finance, technology, and legal matters when evaluating a software company.

What are the 4 P’s of due diligence? The 4 P’s of due diligence typically refer to:

1. People: Assessing the key personnel, their qualifications, and their roles in the business.
2. Product/Service: Evaluating the company’s offerings, their quality, and market fit.
3. Processes: Examining the company’s operational processes, workflows, and efficiency.
4. Profitability: Analyzing the financial health, revenue, and profitability of the business.

What are the three 3 types of diligence? The three primary types of diligence are:

1. Financial Due Diligence: Focusing on the financial aspects of a business, including its financial statements, cash flow, and assets.
2. Legal Due Diligence: Examining legal aspects such as contracts, litigation, intellectual property, and compliance with laws and regulations.
3. Operational Due Diligence: Assessing the company’s operational processes, management, and efficiency.

What are the 3 P’s of due diligence? The 3 P’s of due diligence often refer to:

1. People: Evaluating the qualifications, experience, and integrity of the people involved in the business.
2. Process: Analyzing the company’s operational processes and workflows to identify potential inefficiencies or risks.
3. Product/Service: Assessing the quality, market fit, and competitive advantage of the company’s products or services.

What are the 3 principles of due diligence? The three principles of due diligence are typically:

1. Thoroughness: Ensuring a comprehensive and diligent investigation of all relevant aspects.
2. Independence: Conducting the assessment impartially and without conflicts of interest.
3. Documentation: Maintaining thorough records of the due diligence process, findings, and decisions.

What are the two types of due diligence? Two common types of due diligence are:

1. Buyer Due Diligence: Conducted by a potential buyer to assess the target company before a business acquisition or investment.
2. Seller Due Diligence: Performed by a seller to proactively prepare a business for sale, providing transparency to potential buyers.

What is new technology due diligence? New technology due diligence involves evaluating the technological aspects of a company, especially when considering investments, partnerships, or acquisitions involving innovative or tech-driven businesses. It assesses technology readiness, intellectual property, cybersecurity, and scalability.

How much does technical due diligence cost? The cost of technical due diligence can vary widely depending on the complexity of the business, the depth of the assessment, and the expertise required. It may range from thousands to tens of thousands of dollars for smaller companies, while large-scale due diligence for major acquisitions or investments can cost significantly more.

Who conducts due diligence for a company? Due diligence can be conducted by internal teams within a company or by external experts and consultants, depending on the resources and expertise available. External parties, such as accounting firms, law firms, and specialized due diligence providers, are often engaged to perform comprehensive due diligence.

What is a due diligence checklist? A due diligence checklist is a structured document that outlines the key items, tasks, and information that need to be reviewed and assessed during the due diligence process. It serves as a guide to ensure that all relevant aspects are thoroughly examined and documented.

What are the 4 C’s vs the 4Ps? The 4 C’s and the 4Ps are different marketing frameworks:

• 4Ps (Product, Price, Place, Promotion): A traditional marketing mix framework used to define a company’s marketing strategy.
• 4 C’s (Consumer, Cost, Convenience, Communication): A customer-centric marketing framework that focuses on meeting customer needs and preferences.

What is the 4P methodology? The 4P methodology is a marketing strategy framework that stands for Product, Price, Place, and Promotion. It helps businesses make marketing decisions by considering these four key elements.

What is a due diligence framework? A due diligence framework is a structured approach or methodology for conducting due diligence assessments. It outlines the steps, criteria, and processes to follow when evaluating a potential investment, acquisition, or business opportunity.

Which level of due diligence is applied most commonly? The level of due diligence applied most commonly depends on the nature and scale of the transaction or opportunity. Typically, a moderate level of due diligence is applied as a standard practice. However, for significant investments or acquisitions, a comprehensive and in-depth due diligence process may be necessary.

What are the 7 steps that companies must implement to demonstrate due diligence? Demonstrating due diligence involves various steps, which may include:

1. Define objectives and scope.
2. Assemble a due diligence team.
3. Collect and analyze relevant data.
4. Assess risks and opportunities.
5. Develop a mitigation plan.
6. Document the process and findings.
7. Make informed decisions and take necessary actions.

Which are the five steps to client due diligence? Client due diligence (CDD) typically involves:

1. Identifying and verifying the client’s identity.
2. Understanding the nature and purpose of the client relationship.
3. Assessing and managing risks associated with the client.
4. Conducting ongoing monitoring of the client relationship.
5. Reporting suspicious activities to relevant authorities (anti-money laundering compliance).

What are the most important parts of due diligence? The most important parts of due diligence can vary depending on the context but often include financial analysis, legal review, market research, operational assessments, and technology evaluations. The key components of due diligence depend on the specific goals and risks associated with the transaction or opportunity.

What are the basic steps of due diligence? The basic steps of due diligence include:

1. Define objectives and scope.
2. Assemble a due diligence team.
3. Collect and review relevant documents and information.
4. Analyze and assess findings.
5. Identify risks and opportunities.
6. Document the process and findings.
7. Make informed decisions or recommendations.

What is the difference between due diligence and compliance? Due diligence is a proactive investigation or assessment process conducted to make informed decisions, mitigate risks, and ensure transparency in business transactions. Compliance, on the other hand, involves adhering to established laws, regulations, and industry standards to ensure that a business operates within legal and ethical boundaries.

What are simplified due diligence rules? Simplified due diligence rules are regulatory guidelines that allow for reduced or streamlined due diligence procedures in certain low-risk scenarios. These rules are often applied in anti-money laundering (AML) and know your customer (KYC) processes to reduce the burden on businesses when dealing with low-risk clients or transactions.

What are some examples of due diligence? Examples of due diligence include:

1. Financial Due Diligence: Analyzing a company’s financial statements before an acquisition.
2. Legal Due Diligence: Reviewing contracts and legal documents during a merger.
3. Real Estate Due Diligence: Assessing property condition before purchase.
4. Cybersecurity Due Diligence: Evaluating the security of a tech company’s systems.
5. Environmental Due Diligence: Investigating potential environmental liabilities in real estate deals.

What is the difference between due diligence and M&A? Due diligence is a process conducted during mergers and acquisitions (M&A). M&A refers to the overall strategy of merging or acquiring another company, while due diligence is the detailed investigation and assessment of that company to identify risks, opportunities, and valuation factors before completing the transaction.

What is the difference between audit and due diligence? An audit is a financial examination or review typically performed by external auditors to ensure the accuracy of a company’s financial statements. Due diligence, on the other hand, is a broader process that encompasses financial, legal, operational, and strategic assessments conducted in preparation for various business transactions, including mergers, acquisitions, investments, and partnerships.

What is desktop due diligence? Desktop due diligence refers to a preliminary assessment or review of information and data conducted remotely, often using digital tools and documents, without physical site visits. It is a cost-effective way to gather initial information before deciding whether to proceed with a more extensive due diligence process.

How to do due diligence on technology? To conduct due diligence on technology, consider the following steps:

1. Review technology assets and intellectual property.
2. Assess the technology’s scalability and compatibility with your goals.
3. Evaluate cybersecurity measures and data privacy compliance.
4. Examine software development practices and code quality.
5. Investigate technology partnerships and agreements.
6. Engage technical experts for a thorough assessment.
7. Document findings and assess potential risks and opportunities.

What is digital due diligence? Digital due diligence is a specialized form of due diligence that focuses on assessing digital assets, online presence, and technology-related aspects of a business. It includes evaluating a company’s website, social media presence, online reputation, and digital marketing strategies.

Conclusion

Due diligence technology and services have progressed far beyond dusty physical data rooms. Solutions like Merrill DatasiteOne, EY Vantage, and IntraLinks streamline processes, enhance collaboration, apply intelligence, and give stakeholders confidence in evaluating deals. For smooth due diligence at any business scale, these modern platforms significantly boost outcomes and experience quality.