Know What It Takes To Grow

Most private equity firms conduct deep financial and operational diligence when evaluating an acquisition target. But while balance sheets and back-office systems get dissected line by line, one of the most important levers of growth is often overlooked: marketing.

Marketing due diligence is the structured process of evaluating a company’s ability to generate demand, convert leads into revenue, and scale top-line performance post-acquisition. It’s not just about looking at ad spend or website traffic — it’s about understanding whether the strategy, team, systems, and performance metrics are aligned with the growth targets modeled into your investment thesis.

When firms fail to assess marketing readiness before the deal closes, they often inherit a problem that takes a year — sometimes longer — to fix. The consequences include delayed revenue, missed forecasts, CMO turnover, and significant reinvestment in rebuilding the marketing function from the ground up.

Marketing Readiness Is Not a Given — It’s a Risk Variable

Many founders and management teams can speak confidently about product features, sales cycles, and customer retention. But ask them about their demand generation funnel, MQL-to-SQL conversion rates, or paid media efficiency, and the answers become vague — or non-existent.

Here’s the reality:

• A surprising number of $10M–$100M revenue companies operate without a true marketing leader.
• Campaigns are often ad hoc, disconnected from strategy, or entirely dependent on sales enablement.
• Key roles like marketing operations, content strategy, or demand generation may not exist at all.
• The martech stack may be underutilized, misconfigured, or completely absent.
• Attribution and reporting are often missing or inaccurate.

When these conditions exist, and a deal closes with growth expectations baked into the pro forma, your team inherits an underpowered engine — one that can’t support the velocity needed to create value on the timeline.

The High Cost of Inheriting a Broken Marketing Function

When marketing readiness isn’t evaluated pre-close, the real cost isn’t just operational — it’s financial. Let’s say your acquisition model projects $10 million in top-line growth within 12 months of closing. If the marketing function isn’t equipped to generate qualified pipeline, and it takes 9–18 months to build the right team, systems, and strategy, that’s $10 million in delayed revenue — or more.

Now multiply that across multiple portfolio companies. You’re not just missing forecasts — you’re affecting IRR, delaying exits, and compounding pressure on leadership teams.

These delays are common. And they’re predictable.

Why? Because the typical PE diligence process evaluates operational and financial controls but rarely scrutinizes the commercial growth engine with the same rigor.

What Should Be Evaluated in Marketing Due Diligence?

At Moving Minds, we assess seven core pillars that determine whether a marketing function can actually support the growth expectations in your deal model.

1. People & Talent

• Is there a proven marketing leader in place?
• Are roles like demand generation, product marketing, and marketing ops staffed appropriately?
• Does the team have experience scaling at the intended revenue stage?

2. Strategy Alignment

• Is there a defined go-to-market strategy?
• Are positioning and messaging clear and competitive?
• Are marketing objectives aligned with revenue-stage priorities?

3. Channels & Tactics

• What channels are active today (paid media, ABM, SEO, content, events)?
• Are they generating consistent, measurable pipeline?
• Is the channel mix scalable or overly dependent on one tactic?

4. Marketing Technology & Systems

• Is there a martech stack in place — and is it fully integrated?
• Are CRM, MAP, and analytics tools configured to support attribution and automation?
• Is there visibility into lead sources, campaign performance, and buyer behavior?

5. Marketing Budget & Advertising Spend

• How much is being invested in marketing relative to industry benchmarks?
• Is spend allocated effectively across people, media, technology, and agencies?
• Is there underinvestment — or misalignment between budget and expectations?

6. Marketing Performance & KPIs

• Are marketing outcomes tied to revenue metrics?
• Is there consistent tracking of MQLs, SQLs, pipeline contribution, and CAC?
• Are decisions data-informed — or driven by gut feel?

7. Competitive Visibility

• How does the brand rank in SEO, domain authority, and paid search visibility?
• Are competitors outspending or out-positioning the company in key channels?
• Is the company actively shaping category leadership — or invisible in the market?

These pillars are scored and benchmarked using a structured Marketing Readiness Scorecard — a tool we use to help PE partners visualize commercial risk before signing the deal.

Who Performs Marketing Due Diligence?

Our due diligence work is led by experienced Fractional CMOs — senior marketing executives who have built high-performing marketing functions for both startups and mature portfolio companies.

Unlike generalist consultants or analysts who take a top-line view, our team dives deep into the operational realities:

• Can the current team execute?
• Can the current systems scale?
• Will the budget support pipeline generation and brand visibility?
• Is leadership capable of delivering results — or will they need to be replaced?

These assessments aren’t academic. They’re built to help you adjust forecasts, plan for investments, and accelerate execution on Day One post-close.

When to Perform Marketing Due Diligence in the Deal Process

The ideal window for marketing due diligence is post-LOI, during confirmatory diligence.

At this stage, you’re already assessing financials, systems, legal risk, and cultural fit. Adding a structured marketing review fits naturally into this process and equips you to:

• Adjust your growth model if readiness is below expectations
• Understand what it will cost — and how long it will take — to build a scalable engine
• Decide whether interim leadership or execution support is needed post-close

Our Private Equity CMO services are often engaged during this same window to help stand up initial programs, fill execution gaps, and lead immediate turnaround efforts when necessary.

How Much Should Marketing Actually Cost?

Most private equity investors are surprised to learn just how much high-growth companies spend on marketing — and how misaligned many targets are at time of acquisition.

Here are typical marketing investment benchmarks as a percentage of revenue:

Industry	Avg. % of Revenue Spent on Marketing
SaaS	10–20%
Consumer Goods	8–12%
Healthcare	3–5%
Manufacturing	2–4%
B2B Services	6–10%

And here’s how that budget is typically allocated:

• 35–45%: Salaries & marketing leadership
• 25–35%: Paid media & demand gen
• 15–20%: Martech platforms & tools
• 5–10%: Creative, content, and agency partners

If your acquisition target is operating with < 3% marketing spend and no strategic leadership in place, it’s unlikely they can deliver on pro forma expectations without a major ramp in investment — and fast.

The True Cost and Timeline to Build a Scalable Marketing Function

Here’s what it realistically takes to go from an underdeveloped marketing function to a high-performing engine that can support accelerated revenue growth:

Milestone	Timeframe	Risk / Cost Impact
Hire a qualified CMO	4–6 months	$250K+ lost if mis-hired
Hire full marketing team	6–12 months	Often $500K–$1M+ in total cost
Implement martech stack	3–6 months	Time-intensive and tech-dependent
Develop GTM strategy + campaigns	3–6 months	Requires experienced leadership
See consistent revenue impact	9–18 months	Opportunity cost = missed growth targets

And that’s assuming no misfires. Many firms end up hiring and rehiring leadership roles, replacing agencies, or pivoting strategies — resetting the timeline entirely.

Marketing due diligence isn’t just about protecting growth projections. It’s about accelerating value creation by knowing what you’re walking into — and whether the engine is ready to run.

Marketing Due Diligence Protects and Accelerates Portfolio Value

Marketing is one of the few levers of value creation that can be controlled and improved post-close — but only if it’s understood and addressed early.

Our Fractional CMOs and private equity marketing experts at Moving Minds help firms:

• Understand the true marketing readiness of a target.
• Benchmark against industry standards.
• Uncover hidden risks and budget gaps.
• Align strategy and structure with growth goals.
• Deliver post-close execution plans that reduce time to impact.

Whether you’re in diligence now or planning for your next acquisition, marketing due diligence should be on your checklist — right next to finance, legal, and operations.

Request a Marketing Readiness Assessment

Want to see what this looks like in action?

Request a sample Marketing Readiness Scorecard or schedule a call with our team to discuss an active or upcoming acquisition. We’ll help you evaluate what it will take to hit your growth targets — before you buy.