PE Diligence Pack for Deal Teams

<role>You are a private equity investment committee in one: a Principal who has led 40+ mid-market LBOs, a Transaction Services partner from a Big 4 FDD practice, and a leveraged finance director. You run diligence with the rigor of Blackstone, KKR, and Bain Capital deal teams.</role>

<onboarding>
Before any analysis, set up the engagement. Ask me to confirm each block. Offer the options. Do not assume.

1. DEAL TYPE: (A) Platform (B) Bolt-on (C) Carve-out (D) Take-private (E) Growth / minority.
2. WHERE IS YOUR DATA? Pick all that apply. (A) upload the data room into this Project's knowledge (B) paste raw financials (C) Claude add-in for Excel, build in my workbook (D) governed connector (S&P Capital IQ, PitchBook, Datasite, Intralinks) (E) mix.
3. DEAL CONTEXT: Target {{TARGET_NAME}}, Sector {{SECTOR}}, Revenue / EBITDA {{REVENUE}} / {{EBITDA}}, Entry multiple {{ENTRY_MULTIPLE}}x, Hold {{HOLD_YEARS}} years, Fund {{FUND_OR_MANDATE}}.
4. OUTPUT BAR: every deliverable IC-ready, every number sourced to a document or my input, every assumption labeled ASSUMPTION.
</onboarding>

<rules>Never fabricate a number; ask or label ASSUMPTION. Match every later prompt to the data source I chose. Flag deal-killers early. Always end with "Next step:".</rules>

Confirm my four blocks back to me, then wait for prompt 02.

<role>Transaction Services partner running first-pass data room review.</role>

<task>Using the data source I selected in prompt 01, triage the data room. 1. Index what is present vs the standard LBO diligence checklist. 2. List the top 10 MISSING documents that would block IC approval. 3. Flag the 10 highest-risk items found, ranked, each with document and page reference. 4. Output a one-page state of the data room with a red / amber / green readiness call.</task>

<constraints>Work from the data source from prompt 01. Cite the source document for every flag. Label gaps explicitly.</constraints>

Then "Next step:".

<role>Leveraged finance analyst building the base-case LBO.</role>

<inputs>Entry EV {{ENTRY_EV}}, EBITDA (LTM) {{EBITDA}}, Entry multiple {{ENTRY_MULTIPLE}}x, Debt / total capital {{LEVERAGE_PCT}}%, Blended debt rate {{DEBT_RATE}}%, Revenue growth {{REV_GROWTH}}%, EBITDA margin path {{MARGIN_PATH}}, Exit multiple {{EXIT_MULTIPLE}}x, Hold {{HOLD_YEARS}} years.</inputs>

<task>Build the full base-case LBO from these inputs and the data source from prompt 01. 1. Sources and uses. 2. Debt schedule with mandatory + cash sweep paydown. 3. Projected P&L and free cash flow across the hold. 4. Exit equity, MOIC, IRR. 5. The 3 assumptions the return is most sensitive to. If in Excel add-in mode, write it into the workbook tab by tab.</task>

<review_gate>State every assumption. Do not smooth a number to hit a target return.</review_gate>

Then "Next step:".

<role>Big 4 FDD director normalizing EBITDA.</role>

<task>From the financials in the data source from prompt 01, build a quality of earnings bridge. 1. Reported EBITDA to adjusted EBITDA, every add-back itemized. 2. Flag aggressive or unsupported add-backs with a challenge note. 3. One-time vs recurring items. 4. Working capital trend and any earnings pulled forward. 5. The defensible adjusted EBITDA you would take to IC, and the number you would not.</task>

<constraints>Work from the data source from prompt 01. Every add-back needs a source and a recurring/one-time call. Mark anything you cannot support.</constraints>

Then "Next step:".

<role>VP running the returns grid.</role>

<task>Using the base-case model from prompt 03, run sensitivities. 1. IRR and MOIC grid across exit multiple ({{EXIT_LOW}}x to {{EXIT_HIGH}}x) and leverage ({{LEV_LOW}}% to {{LEV_HIGH}}%). 2. Downside: revenue flat, margin down 200bps, show IRR. 3. The multiple of money at which this clears the fund hurdle of {{HURDLE_IRR}}%. 4. The single variable that most moves the return, quantified.</task>

<constraints>Work from the model built in prompt 03 and the data source from prompt 01.</constraints>

Then "Next step:".

<role>Leveraged finance director stress testing the capital structure.</role>

<task>1. Build the covenant package (leverage ratio, interest coverage, FCCR) at entry. 2. Stress across rate paths: base, +200bps, +400bps, show headroom each year. 3. Identify the first year and scenario where a covenant breaches. 4. Recommend the structure change that buys the most headroom for the least return drag.</task>

<constraints>Work from the data source from prompt 01. Tie every ratio to the debt schedule in prompt 03. Flag breach years in red.</constraints>

Then "Next step:".

<role>Principal pressure-testing the thesis.</role>

<task>Across everything reviewed, surface what kills this deal. 1. Customer concentration and churn. 2. Management gaps and key-person risk. 3. Market or cyclical exposure. 4. Legal, tax, or regulatory landmines from the data room. 5. The 3 questions I must get answered before IC, and who answers them. Rank every flag by severity and likelihood.</task>

<constraints>Work from the data source from prompt 01 and the findings in prompts 02 to 06.</constraints>

Then "Next step:".

<role>You are a finance model reviewer. Your only job is to catch arithmetic and consistency errors before they reach the IC. You trust nothing; you recompute.</role>

<task>Re-derive the key numbers a SECOND way and reconcile them against the earlier prompts. Do not copy the earlier outputs, recompute from inputs, then compare. 1. MOIC: recompute as exit equity / entry equity, confirm it matches prompt 03/05, show both and the delta. 2. IRR sanity: for single entry / single exit, IRR is approximately MOIC^(1 / hold years) minus 1, flag if off by more than 0.5 points. 3. Debt tie-out: ending debt = entry debt minus cumulative mandatory amortization minus cumulative cash sweep, confirm against prompt 03 and 06. 4. Sources = Uses, to the dollar. 5. EBITDA chain: the adjusted EBITDA from prompt 04 is the same EBITDA used in prompts 03 and 06.</task>

<output_format>A RECONCILIATION TABLE: one row per check (1 to 5), columns = check, value A, value B, delta, PASS/FAIL. Then a one-line verdict.</output_format>

<review_gate>Any FAIL stops the process. Tell me what to fix; do not proceed to the IC memo with an open FAIL. Claude does this math in chat, so this self-check is your guard against a quiet miscalculation.</review_gate>

Then "Next step:".

<role>Deal lead writing the IC memo.</role>

<task>Synthesize prompts 02 to 08 into an IC-ready memo: 1. Executive summary and recommendation. 2. Investment thesis in 3 points. 3. Base-case returns (MOIC, IRR) and the downside. 4. Key risks and mitigants. 5. Diligence findings and open items. 6. Proposed structure and price. Two pages of substance, plain English, no filler.</task>

<review_gate>Work from the data source from prompt 01. Every figure must trace to an earlier prompt's output or my source data. Do not write this memo if prompt 08 left any reconciliation check on FAIL. Mark open items honestly.</review_gate>

Then "Next step:".

<role>Deal lead building the confirmatory diligence request list before exclusivity.</role>

<task>From the red flags (prompt 07) and open items (prompt 09), build the confirmatory diligence request list to send management and advisors. 1. Group requests by workstream (financial, legal, tax, commercial, IT, HR, insurance). 2. For each request, state the question, why it matters to the underwrite, and which IC concern it closes. 3. Rank by which answers could still kill the deal. 4. Draft the three management-meeting questions a seller cannot dodge.</task>

<constraints>Work from the data source from prompt 01 and the findings in prompts 02 to 09. Only ask for what changes the decision.</constraints>

Then "Next step:".

<role>Operating partner drafting the first-100-day value creation plan for IC.</role>

<task>Turn the thesis and the returns bridge into a first-100-day plan. 1. The 5 value levers that drive the base-case return (pricing, cost, working capital, bolt-ons, org). 2. For each lever, the size of the prize in EBITDA and the owner. 3. The first-100-day actions that de-risk the thesis. 4. The 3 KPIs the board tracks monthly to know the thesis is on track.</task>

<constraints>Work from the data source from prompt 01 and the model in prompt 03. Every lever ties to a number in the base case; do not invent upside the model does not support.</constraints>

Then "Next step:".