Why Due Diligence not the pitch deck shapes the deal

In the Moldovan tech ecosystem, particularly among ICT startups and companies connected to the IT Park or Start-Up Moldova community, most conversations revolve around familiar IT topics: how great the idea is, how innovative the product seems to be, the market opportunity, the gap the startup is filling, and the ambition to scale. Of course, all these elements matter, as they help companies get noticed and initiate conversations with larger technology players and external investors. And all this is helping carry a transaction forward, right?

Wrong.

When an acquisition, strategic investment, or partial exit becomes a real possibility, the focus shifts. At that point, the question is no longer what the company plans to become, but what it actually is today and how it’s been operating from day 1. This shift happens through due diligence, a concept causing goosebumps in most of the first-time enthusiastic founders.

When the Story Becomes a File?

Due diligence is the moment when a business stops being a “unicorn-wannabe” narrative and becomes a strictly compiled file. And it is during this process that most transactions are shaped, restructured, or even stopped.

Moldovan startups are raising meaningful capital and engaging with buyers and investors from the EU and the US at an increasingly active pace; in 2024, companies raised nearly $8 million, about double the prior year, and ecosystem initiatives facilitated hundreds of investor connections. However, all these counterparties apply standardised due diligence frameworks, regardless of local market habits or informality; the same questions are asked, the same documents are expected, and the same gaps raise concern.

International evidence confirms the central role of due diligence in transaction outcomes. Bain’s Global M&A Report (2020) notes that nearly 60% of executives surveyed attributed unsuccessful transactions to shortcomings in due diligence, particularly the failure to identify critical issues early. In KPMG’s 2023 DealIntent survey, more than half of dealmakers said they had cancelled transactions because of due diligence findings, even when those findings related to ESG (Environmental, Social, and Governance) risks. These trends make one thing clearer than ever: once due diligence begins, expectations are set externally, not negotiated locally.

IT Park Doesn’t Replace Internal Order

In recent years, Moldova’s ICT sector has become an increasingly important part of the national economy. In 2023, it accounted for over 8% of GDP, and ICT exports exceeded USD 580 million, with the IT component generating more than a quarter of total services exports in 2025. Estonia-style growth in export-oriented IT products and services has helped attract both local and foreign investor interest.

Yes, the IT Park regime offers clear fiscal and administrative advantages and has supported the expansion of the tech ecosystem, but residency status doesn’t replace internal order, nor does it reduce scrutiny of ownership, contracts, people, data protection, or decision-making. If anything, companies that signal cross-border ambition are reviewed more carefully, because scalability and regulatory exposure are assumed.

Governance as Transaction Readiness

A common misconception is that due diligence preparation starts when a buyer appears. In reality, by the time external due diligence begins, many outcomes are already influenced by how the company has been run internally over time.

This is where corporate governance becomes relevant, even for young or fast-growing companies. Moldovan company law already imposes baseline governance obligations on limited liability and joint stock companies. In transactions, however, governance isn’t assessed only formally. Investors look at how decisions are actually made, documented, and implemented.

They look for clarity of authority, traceability of approvals, and consistency between documents and practice. 

Enthusiasm and novelty are no longer enough. What founders often experience as administrative friction is, in transactional reality, a stabilising factor that reduces uncertainty before it becomes costly.

Where Due Diligence Expectations Are Moving?

Broader European regulatory developments reinforce this direction. In June 2024, the EU adopted Directive (EU) 2024/1760 on corporate sustainability due diligence, aimed primarily at large companies. Its relevance for Moldovan ICT companies is indirect, but it sure is real.

The directive is pushing EU-based buyers and investors toward more formalised, documented approaches to risk identification and remediation across their chains of activity. Logically, these expectations are increasingly flowing into transaction due diligence, even where the target company itself is not directly within scope. The direction is clear: due diligence is becoming more structured and less tolerant of informality.

Timing, Leverage, and Late Fixes

The most difficult situations arise when issues surface late and must be addressed under time pressure. At that stage, the buyer controls the timeline, the order in which issues are tackled, and the remedies proposed. A legal due diligence revealing material red flags may lead to transaction delays, renegotiation of price or terms, imposition of conditions precedent, enhanced representations, warranties or indemnities, allocation of specific risks, or, in severe cases, termination of the transaction due to unacceptable legal exposure.

Even when a transaction doesn’t fail outright, late remediation almost always results in reduced negotiating space and less favourable terms.

This is why due diligence readiness shouldn’t be treated as an exit exercise and should become a form of ongoing internal discipline. Regular internal compliance checks, covering areas such as intellectual property ownership, data protection, employment structures, key commercial contracts, and decision-making processes, are a founder’s insurance policy that both friction and cost will be reduced when a transaction becomes real.

Whether a transaction ultimately happens or not, this discipline strengthens the business. If a deal proceeds, preparation protects the company from last-minute pressure. If it doesn’t, preparation still improves internal clarity and resilience.

A Practical Test for Founders

A simple test for founders is this: if you were asked tomorrow to open a data room, could you clearly show who owns the company and how decisions are made, who owns the IP and under what contracts, how people are engaged and protected legally, what your key commercial contracts actually say, how your financial figures are supported, and whether IT Park status and data protection obligations are reflected in practice, not just on paper?

If the answer is uncertain, the right moment to address it is earlier, quietly, and as part of running the business properly.

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