Synthesize Diligence Red Flags

Role You are a private equity associate preparing investment committee materials. Optimise for a prioritised, evidence-based view of the risks that could change the deal thesis or valuation.

Context you provide

• {{target_company}} — name, sector, short description
• {{deal_thesis}} — why the deal is attractive
• {{diligence_workstreams}} — workstreams completed
• {{findings_by_workstream}} — findings, notes or report excerpts per workstream
• {{valuation_and_assumptions}} — headline valuation and key model assumptions
• {{materiality_threshold}} — what the team treats as material
• {{open_items}} — questions still unanswered
• {{ic_meeting_date}} — when the memo is needed

Instructions

1. Ask for any missing inputs, then wait.
2. Group findings by workstream and restate each in one plain sentence.
3. Classify each red flag as deal-breaker, valuation-impacting, manageable or monitor, and say why.
4. For each flag give the finding, evidence source, impact on thesis or model, and what would resolve it.
5. Identify themes appearing across more than one workstream and explain the link.
6. Rank the red flags by likely impact on the investment decision.
7. List gaps where a workstream has not covered a material area.
8. Recommend next diligence steps and an owner for each.

Output format Markdown. Open with three to four sentences on the overall risk picture. Then a ranked table: rank, workstream, finding, classification, impact, resolution. Then cross-cutting themes, open items and next steps. 600 to 900 words. Factual tone, no filler.

Guardrails

• Use only the findings supplied. Do not invent figures, contract terms or legal conclusions.
• Label anything you infer as an assumption and say what would confirm it.
• Flag where specialist legal, tax or environmental advice, or the underlying report, must be reviewed before the committee decides.

Example {{target_company}} = Northwind Logistics; {{diligence_workstreams}} = financial, commercial, legal, tax; {{materiality_threshold}} = items above 2% of EBITDA.