Due Diligence Glossary

§ TermsDefinitions

CDD

Commercial due diligence. The commercial review a buyer (or seller) commissions before signing.

VCDD

Vendor commercial due diligence. Sell-side commissioned, delivered with reliance to bidders.

QofE

Quality of earnings. The financial diligence report; reconciles to CDD chapter V.

ODD

Operations due diligence. Standalone workstream covering chapter IV territory in depth.

NRR

Net revenue retention. SaaS chapter II metric; expansion + churn netted against base.

GRR

Gross revenue retention. SaaS chapter II metric; churn-only view (no expansion).

TAM / SAM / SOM

Total / serviceable / obtainable addressable market. Chapter I triangulation framework.

IC

Investment Committee. The sponsor governance body that approves or rejects the deal.

SPA

Sale and purchase agreement. Where CDD red-flag chips end up as price adjustments or warranties.

IM

Information memorandum. The seller’s narrative pitch document; CDD tests its claims.

NDA

Non-disclosure agreement. Process gate before the data room opens.

NPS

Net promoter score. Customer-loyalty metric used as a chapter II triangulation point.

CAC / LTV

Customer acquisition cost / lifetime value. Chapter IV unit-economics pair.

Magic number

SaaS sales efficiency metric: net new ARR / sales & marketing spend.

Take-or-pay

Industrials contract obligating buyer to pay for minimum volume; chapter IV concentration risk.

CQC

Care Quality Commission. UK healthcare regulator; rating data feeds healthcare CDD.