Diligence: the acquisition data room, explained

What Diligence is

Diligence is Verinode's acquisition data room. It exists for a specific moment: a buyer, typically a private-equity-backed multi-location operator or another same-entity buyer using Verinode | HQ, is evaluating a restoration company to acquire, and needs a fast, honest read on that target's numbers without demanding a folder of raw financial statements before a relationship of trust exists.

Diligence is two-sided, and the two sides never see the same screen:

• The buyer (an HQ workspace, referred to internally as the acquirer) opens an engagement for a target company and requests specific categories of data.
• The target operator (the seller) gets a free Verinode account, sees exactly what has been requested, and decides, category by category, what to share and when to take it back.

Nothing moves until the target grants it, and what moves is never the target's raw documents. It is the target's own normalized numbers, the same figures the normalizer already builds from their connected data for their own margin view, placed next to peer benchmarks. Verinode computes the comparison and flags outliers as questions to verify. It does not decide whether the deal is good, and it never sells any operator's data to carriers or anyone else. See how benchmarks work for how the peer numbers behind this screen are built.

Where to find it

Buyer side. Open Diligence from the HQ sidebar at /franchise/diligence. It only appears for workspaces with the Diligence capability enabled; if your workspace doesn't have it, the item is hidden rather than shown disabled.

Seller side. The target operator does not go looking for Diligence on their own. A buyer's invite email or link brings them to an acceptance screen (/diligence/accept?token=...) inside their IQ workspace. Once accepted, their ongoing control panel lives at /diligence, and they can return to it any time to add or remove access.

The two-sided model

How a buyer opens an engagement

From the Diligence home, click New engagement. A form asks for:

• Company name, the target's name (e.g. "Acme Restoration").
• Contact email, the person at the target company who will receive the invite.
• Deal stage, either Post-LOI / Exclusivity (the default) or Pre-LOI.
• Location and Website (both optional).
• Request categories, a checklist of which data categories to ask for.

Three categories are selectable today: Financials, Jobs & Claims, and AP & Procurement. A fourth, Team & Compensation, is shown but grayed out with the note "Available after antitrust review," because compensation data carries wage-fixing exposure between competitors and stays locked until that legal review clears.

Under the checklist, every request carries this line, unconditionally:

Computed from the documents provided; Verinode does not verify completeness or audit the underlying data.

Click Create & get invite link. If email delivery works, you'll see "We emailed the invitation to [address]. They sign up for a free account and choose what to share. Nothing unlocks until they grant it." alongside a copyable invite link, in case you'd rather send it yourself. If the email couldn't be sent, the same explanation appears without the "we emailed" line, and the link is the only way to reach them. Either way, the copy is deliberate: nothing is visible to you until the target actively grants it.

How a target accepts

The target's contact opens the invite link, signs up for a free Verinode account if they don't already have one, and lands on "Diligence invitation." Once the token is verified, the copy reads:

You're in. Nothing is shared yet. Choose what to share, category by category, and revoke any time.

A Review what to share button takes them straight to their consent panel. If the link's token is missing or invalid, they instead see "This link is missing its invitation token. Ask the buyer to resend it." or an error explaining the invite couldn't be accepted.

How a target grants and revokes

On the Diligence access page, the target sees one section per buyer that has invited them, with the buyer's status shown in small caps next to their name (Invited, Active, Closed: Won, Closed: Lost, Withdrawn, or Expired). Under each buyer, every requested category lists:

• The category name and its one-line description.
• A plain-language preview of exactly what that buyer will see if the category is shared, worded so there's no ambiguity, for example: "Your normalized profit-and-loss ratios next to peer benchmarks. Not your raw books." for Financials, or "Your job cycle time and payment timing next to peer benchmarks. Not individual jobs or customers." for Jobs & Claims.
• A Share button (or, once granted, a Revoke button in its place).

Clicking Share grants that category immediately; clicking Revoke takes it away immediately. Both actions only appear while the engagement is live (Invited or Active); once a buyer resolves the engagement, the grant controls disappear along with the buyer's access.

If the operator has no diligence invitations at all, the page reads simply:

When a prospective buyer invites you into a diligence review, it shows up here. You choose exactly what to share, category by category, and you can revoke access at any time.

Your position vs the market: the seller's own tool

Above the list of buyers, if the target has enough of their own data flowing in to compute at least one metric, a section called Your position vs the market appears. This is the target's own tool, not something a buyer sees, and it doesn't depend on sharing anything with anyone. It shows the same normalized numbers a buyer would eventually see, side by side with the market:

• You, the target's own value for that metric.
• Market, the peer median for the same metric.

It exists so the target can walk into a conversation with a buyer already knowing whether their numbers read as a strength to defend or a gap to expect questions about. A single dash character in either column means Verinode doesn't have enough data yet to compute that figure.

The buyer's Diligence home

Overview tiles

Three tiles summarize every engagement your workspace has ever opened:

• Active, sharing data now, sub-labeled "Sharing data now": engagements currently in the Active status with at least one live grant.
• Awaiting acceptance, sub-labeled "Invited, not yet started": engagements sitting at Invited, where the target hasn't accepted or hasn't granted anything yet.
• Resolved, sub-labeled "Won, lost, or withdrawn": every engagement that has been closed out, regardless of outcome.

In progress row

Below the tiles, an In progress row lists every live engagement (Invited or Active) as a tile. Each tile shows the target company name, its status as an eyebrow label, how many of the requested categories are currently shared ("2 of 3 categories shared," or "No categories requested" if none were selected), and the deal stage, with a "Demo" tag appended for seeded demo engagements. Clicking a tile opens that engagement's detail workspace.

If there are no engagements in progress, the row reads:

No engagements in progress. Open one to invite an acquisition target to share their numbers. They get a free account and grant access category by category.

(The wording adapts to "conversion candidate" instead of "acquisition target" for a franchisor-as-acquirer workspace, once that instance is available.)

Resolved row

A second row, Resolved, lists every closed engagement the same way. If nothing has been resolved yet, this row is simply omitted from the page.

Inside an engagement: the detail workspace

Clicking any engagement tile opens its detail workspace at /franchise/diligence/[id].

Header

The header shows the target company name, its status pill, and a "Demo" pill if applicable, followed by the deal stage and either "Target has accepted the invite" or "Awaiting invite acceptance," so you always know whether the ball is in your court or theirs.

Candidate profile

A Candidate profile section holds deal context you own as the buyer, entirely separate from anything the target grants: location, website, revenue band, number of locations, service lines (Water, Fire, Mold, Reconstruction, Contents, Commercial large loss), deal size band, deal source (Proprietary, Broker, Inbound, Referral), expected close date, deal owner, and a free-text thesis. If nothing has been filled in yet, it reads "No deal context yet. Add location, deal size, source, and your thesis to keep this candidate organized." Group admins can click Edit (or Add deal context) to fill it in and Save profile.

Data access

A Data access section lists every category you requested, each marked Shared (in green) once the target has granted it, or Awaiting consent while it's still pending. This is the honest workflow state: nothing here is ever fabricated ahead of an actual grant. The same completeness note from the request form repeats underneath: "Computed from the documents provided; Verinode does not verify completeness or audit the underlying data." If no categories were requested at all, it reads "No categories were requested."

Questions to resolve before close

When a granted category's numbers sit meaningfully off the market median, on the side that matters (a materials ratio running high, a margin running low, a cycle time running long), a Questions to resolve before close section appears, marked with an ember-colored rail. Each line is phrased as a verification prompt, never a verdict, for example: "Materials ratio is 22% above the market median. Verify purchasing controls, inventory shrinkage, and any owner add-backs before close." or "Net margin is 18% below the market median. Reconcile owner compensation and one-time items before relying on it." This section only appears when there's something worth checking; a target that reads close to market on every shared metric produces no questions at all.

The consented comparison

For each category the target has granted, a table shows the metric name and three columns:

• Target, the target company's own value, in bold.
• Your network, the median across your own network's locations for the same metric.
• Market, the broader peer benchmark median.

The metrics per category are:

• Financials: Net Margin, Gross Margin, and Operating-Expense Ratio.
• AP & Procurement: Materials Ratio.
• Jobs & Claims: Cycle Time and Days to Pay.
• Team & Compensation: Labor Ratio and Revenue per Employee (available once the antitrust gate clears).

A dash means the figure isn't available yet, most often because a metric needs more of the target's own data flowing in before it can be computed. Revoked or expired categories simply drop out of this table on the next load, the buyer's view goes dark immediately, there is no stale cache of a number the target has taken back.

Resolving the engagement

While an engagement is live, a Resolve section explains: "Resolving closes the engagement and immediately ends the target's shared access. The record is kept as an audit artifact." Three actions are available:

• Mark won, the deal closed.
• Mark lost, it didn't.
• Withdraw, you're stepping back from it.

Any of the three immediately revokes every grant the target had made, the target's data goes dark for you at that instant, and the engagement moves to the Resolved row. Once resolved, the section instead reads "This engagement is closed: won." (or lost, or withdrawn), followed by "Records are retained until [date]" when a retention date applies, since the closed record is kept for a period afterward as an audit trail rather than deleted outright.

What actually flows through consent

This is the detail worth being precise about, because it's the whole reason a target agrees to any of this: granting a category never hands over documents, invoices, job files, or customer names. It hands over a small set of already-normalized ratios and medians, the same category of number that shows up on the target's own margin and benchmark pages, computed the same way for everyone so a buyer across ten targets is comparing apples to apples. The completeness note is stamped on every version of this data for exactly this reason: normalized numbers are only as good as what was fed in, and Verinode is explicit that it hasn't audited the underlying documents.

A grant defaults to a 90-day consent window and expires on its own if the target doesn't extend it, on top of being revocable by the target at will, at any time, for any reason. A resolved engagement's records are retained afterward as an audit artifact, then age out.

Related reading

• Understanding your margin
• How benchmarks work
• Reading a benchmark
• Benchmarks overview
• The decision workspace