Due Diligence Services - Domain Magnate

DUE DILIGENCE SERVICES

For many buyers, due diligence is the most time-consuming and uncertain part of the transaction. Sellers often shy away from an unstructured process. Our due diligence packages are designed to simplify this process for both the buyer and seller. With our proven process and insight gained from hundreds of successful transactions, you can close the deal with confidence and peace of mind.

HOW WE WORK

Numbers

We verify all financial, traffic, and usage claims. We buy similar businesses all the time, so we know what to expect. Our team can quickly notice a discrepancy that would be missed by others.

  • While conducting due diligence for a content site acquisition we discovered that the seller had intentionally faked Google Analytics data.
  • Knowing when something “doesn’t look right” is the first hint that there may be a critical misconfiguration or outright fraud.

People

We closely review the background, track record, and reputation of the seller, core team, and previous owners. We also review contractors that are directly involved with operations on an ongoing basis.
  • Our team uncovered a track record of alleged fraud, disputed transactions, and professional conduct issues with a seller.
  • We successfully avoided potentially disastrous long term consequences.

Risks

Going beyond our deep SEO analysis, we also assess competition, seasonality, industry and keyword trends, external and internal threats, legal issues, and ToS compliance.
  • In one case, we found that a website had Amazon Associates affiliate program compliance issues that could be fixed quickly. Thanks to this discovery, the buyer was able to negotiate a discount.
  • During another review, we identified a seasonality pattern based on the site’s main keywords which showed that the recent increase in traffic/revenue was short-lived and not “stable growth.” The buyer waited a couple of months, traffic started to drop as the peak months passed, and he avoided overpaying.

Opportunitties

We look for quick wins with CRO, SEO, monetization, and marketing opportunities. We can typically get a 20-50% increase by implementing these improvements right away.
  • We acquired a content website with $2,000 per month net income.
  • After implementing a new content strategy by filling content gaps, updating and adding targeting backlinks, and improving conversions, income went up to $5,000 per month in 6 months.

DUE DILIGENCE PACKAGES

COMPREHENSIVE

Inclusions:

  • Financial Verification: reviewing seller’s reports, screenshots, videos, bank and tax statements, and checking for inconsistencies. Comparing revenue numbers to expectations based on the niche and traffic.
  • Revenue Risk Assessment: analyzing possible revenue loss risks due to industry changes, revenue source trends, agreements, comparing to competing businesses.
  • Traffic Verification: reviewing traffic sources, verifying legitimacy of google analytics data,
  • Traffic Risk Assessment: analyzing traffic trends and risks, from industry trends, competitors, maintenance and updates, and other factors
  • In Depth SEO Review: Assessment of the backlinks profile, checking for PBNs and Redirected domains, inspecting link building methods and content quality, assessing SEO vs competitors in the space
  • In Depth Tech Review: Tech stack assessment, review of potential issues, updates, dependancies, risks, maintenance requirements, and improvement opportunities from a technological perspective of the business
  • Brand Reputation Analysis: analyzing business brand reputation, sustainability and longevity
  • Seller Reputation Analysis: includes background checks, reviewing former transaction history, associates, other owned businesses and domains. Search through multiple databases and communities.
  • Risk Assessment: main risks of the businesses and plans how to mitigate them
  • Opportunities: uncovering the best opportunities for growth and improvement
  • Competitor Analysis: reviewing and researching the top competitors
  • ToS & Compliance Audit: auditing potential litigation risks, or compliance issues within industry, legal and with payment processors and monetization partners
  • *Growth Strategy Plan: A detailed 12 months growth strategy plan with scenarios and expectations
  • *Negotiation Guidance: advanced negotiation techniques and advice, recommendation for best closing price and structure
  • Weekly Advisor Meetings until Close
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INITIAL REVIEW

Inclusions:

  • Live Financial Verification
  • Live Traffic Verification
  • Brand Reputation Analysis
  • Advisor Meeting

$750.00

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TIMELINE

PHASE I – QUANTITATIVE

This first phase is a data gathering and verification process. We focus on efficiently gaining an accurate and complete picture of the acquisition target’s financial, traffic, technical, operational, and performance data.

  • Where possible, we get direct access to all relevant platforms and data. This could be everything from Google Analytics and social media metrics to proprietary business intelligence dashboards, online bookkeeping, and contractor management systems.
  • We conduct live revenue verification screen shares with the seller to ensure that we have an additional point of verification to cross-reference with the data we’ve gathered beforehand.
PHASE II – QUALITATIVE

The qualitative phase of due diligence is where the Domain Magnate team offers a unique advantage. The most valuable insight in the deal-making process is not found in spreadsheets, but in communication with the seller.

  • We learn about the seller’s motivations, track record, and background. We carefully review the reputation and credibility of the brand, the core team, and any contractors who are involved with the regular operation of the business.
  • We look out for “black swan” risks and opportunities to approach the deal with terms that mean more than numbers alone. This insight makes all the difference when it’s time to negotiate – it may even decide the success or failure of the deal.
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OUR ADVISORS

Michael Berelavsky

Michael Bereslavsky is the founder and CEO of Domain Magnate. He’s been involved in various internet-based businesses since 2004 and quickly graduated from building, promoting, and monetizing websites to buying and selling them. With over a decade of experience, Michael and Domain Magnate has managed 300+ successful deals.

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Colin Ma

Colin Ma is Deal Manager for Domain Magnate. He has managed numerous successful transactions – assisting with everything from exit planning and deal flow to due diligence and negotiation with Michael. Colin’s analytical and creative skills complement Domain Magnate’s unique qualitative due diligence process.

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CAN YOU DO IT YOURSELF?

It’s certainly possible to handle this crucial process on your own. However, if you would rather work with professionals with a proven track record and lessen the risks of your investment, our team will be happy to take care of it for you. Schedule a consultation and we will help you evaluate your options.

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