Composite case
This autopsy is a composite. It reflects patterns SLAM sees repeatedly across commercial due diligence, assembled from multiple engagements and observable market dynamics. It is not any single company, and any resemblance to a specific business is coincidental.
The Setup
The Business
B2B software and managed services for the logistics sector.
The Numbers
£12M ARR, with a forward plan projecting 30% growth on a strong reported pipeline.
The Deal
Acquired by a growth investor for £58M, underwritten on continuation of the forward number.
The Thesis
The pipeline was full and the process disciplined. Fund the forward plan and hold the trajectory.
This was not a scale bet or a turnaround. It was a continuation bet. The investor was underwriting the forward number essentially as presented, and the single most important input to that number was pipeline coverage. If the coverage was real, the plan was fundable. The entire thesis rested on one figure that everybody treated as objective, because it came straight out of the CRM.
What Diligence Saw
The pipeline looked not just healthy but disciplined, and the supporting signals all pointed the same way.
3.6x
Reported pipeline coverage against the forward number
Read as healthy
100%
CRM field completion across active opportunities
Read as disciplined
±4%
Reported forecast accuracy over the trailing year
Read as reliable
Clean
Stages current, close dates plausible, notes populated
Read as well-run
A metrics-led diligence treats a complete, tidy CRM as evidence of a well-managed pipeline. That is the exact inference this business was built to invite. The data was not just complete. It was complete on purpose, and the purpose was not managing deals.
The Unravelling
Deal closes. Forward plan funded on reported coverage.
The 3.6x figure is the load-bearing input to the model. Nobody has independently recalculated it.
First full quarter. Conversions lag the reported pipeline.
Deals that looked live are not moving. Individually each has a reason: the champion went quiet, procurement is reviewing, the timing slipped.
The new CFO pulls the raw opportunity data.
A large share of "active" pipeline has had no customer-initiated contact in over ninety days. On paper it is live. In reality it is dead and unarchived.
The forecast misses badly.
The reported pipeline converts at a fraction of the historical rate. The number that had been reliable for a year suddenly is not.
The private forecast surfaces.
It emerges that the sales leader kept a personal spreadsheet, never shared with the board, carrying a forecast around 35% below the official pipeline. That was the real operating view all along.
The recalculation lands.
Stripped of dead deals and reconciled to the private view, true coverage was closer to 1.9x, not 3.6x. The forward plan was never fundable on the real number.
The forward plan is reforecast down.
The entry multiple had been paid for a pipeline that existed in the CRM and nowhere else. The continuation thesis is quietly retired.
The Diagnosis
The coverage figure was not a lie anyone told. It was the output of three behaviours that together made the CRM systematically overstate reality, all of them invisible to a diligence that trusted the data because it was tidy.
The CRM was maintained to satisfy management review, not to manage deals. Entries clustered around reporting deadlines rather than tracking the real rhythm of opportunities. The data looked complete precisely because the reps had learned that complete, tidy records are what keep scrutiny away. Completeness was a defensive performance, not a signal of health.
Dead deals were never archived, because killing a deal is a visible loss and leaving it costs nothing today. More than a third of the reported pipeline had not had a customer-initiated interaction in months. Every one of those zombies still counted toward coverage, inflating the single figure the whole thesis rested on.
The sales leader's real forecast lived in a private spreadsheet roughly 35% below the board number. This is the tell that matters most: the honest view existed. Leadership already knew the official pipeline was a performance for owners. The accurate number simply never reached the people pricing the business, because the system that fed them was the one built for appearance.
Why It Compounded
The three lock together. CYA Documentation made the official data untrustworthy as a category. Zombie Pipeline inflated that same data with deals that should have been dead. And the Shadow CRM was the proof that none of this was an accident: the CRO's private spreadsheet was the real forward view, which means the organisation already knew the board number was fiction. The investor did not lack the honest number. The honest number existed on a laptop and was never asked for.
The Cost
1.9x
True coverage, against 3.6x reported
−35%
Gap between the private forecast and the board number
Reforecast
Forward plan revised down inside Year 1
Phantom
The pipeline the multiple was paid for
What a Behavioural Diligence Would Have Caught
Every one of these left a signature detectable with a raw data export and a calendar. None required access the diligence did not already have.
Timestamp Test
Overlaying the CRM's field-change history against the reporting calendar would have shown entries clustering in the days before each review. That clustering is the fingerprint of a system maintained for management, not for deals.
Zombie Filter
Filtering active opportunities for those with no customer-initiated contact in sixty days would have stripped more than a third off reported coverage before the deal was priced.
Shadow Request
Asking the sales leader for their working forecast document, the one they actually run the business from rather than the CRM export, would have surfaced the 35% delta. Resistance to sharing it is itself the finding.
The business did not hide anything a diligence could not have found. It simply presented a tidy surface, and a metrics-led read accepted the surface as the substance.