How to Conduct an Industry Expert Interview for PE Due Diligence
Why an industry expert interview is the analyst’s fast-lane to conviction
An expert conversation delivers context that no syndicated report can replicate. You gain first-hand views on structural growth drivers, cost pressures, and customer pain points. In sectors where financial statements tell only half the story (think fragmented value chains or emerging tech), a single interview can calibrate revenue forecasts and discount rates. The net result is a more realistic valuation and a cleaner investment memo. At Hiros we see funds reduce blind spots materially once they embed two to three expert calls inside the standard commercial diligence work-stream.
Preparing for the interview
Clarify the strategic objective
Begin with the questions the deal team must answer. Common mandates are benchmarking the target against peers, mapping future regulatory hurdles, and pressure-testing management’s growth narrative. Write these goals down; they will dictate which expert profile you need.
Source and vet the right voice
Look for recent, hands-on exposure. A former division VP who exited the industry last quarter beats a retired executive who left eight years ago. We (and many top funds) give extra weight to candidates who have managed P&Ls or led M&A inside the same niche. Screening criteria usually include years in role, geographic relevance, and potential conflicts of interest. When timing is tight, a specialised network such as Hiros can surface qualified experts within hours, already compliance-cleared.
Build a laser-focused question list
Structure questions in a funnel: start wide, then drill deep. A typical 45-minute guide might cover:
Market dynamics (demand inflection points, secular headwinds, customer switching behaviour)
Competitive map (top three players by share, recent pricing moves, route-to-market shifts)
Transaction context (recent deals, observed EBITDA multiples, valuation drivers)
Reserve ten minutes at the end for “unknown unknowns.” This open slot often surfaces supply-chain constraints or impending regulatory changes that never appear in CIMs.
Conducting the conversation
Set the ground rules
Open by confirming confidentiality and time budget. Clarify that the discussion is independent and that you seek candid, experience-based input. Avoid disclosing the target’s name unless the expert already knows the space so intimately that guessing is trivial and the NDA allows it.
Start broad before pinpointing
Kick off with an open prompt such as “Walk me through the biggest shifts you have seen in this segment over the past two years.” This invites a macro-level scan. Then pivot to narrower probes: “How did the shift to subscription pricing affect gross margins across leading vendors last quarter?” Drilling down like this prevents early anchoring on your existing thesis.
Probe with real-world examples
Ask for concrete anecdotes: lost contracts, supply delays, or leadership churn. Tie each story back to a diligence theme. If a former client left the target because of service gaps, you now have a data point to adjust churn assumptions.
Keep the pace and tone neutral
Monitor time so that priority topics are addressed by minute thirty. Listen actively, but avoid leading statements. Balanced questioning preserves objectivity.
Capture every insight
Record the call when permitted, and still take live notes. Mark comments that directly confirm or challenge key investment model inputs (market-size CAGR, margin trajectory, capex intensity). Flag numbers that differ by more than ten percent from management figures; these need triangulation.
Turning raw commentary into actionable diligence
Immediate debrief
Within thirty minutes of hanging up, write a quick debrief that maps each insight to the original objectives. Fast capture prevents “note fade” and positions you to brief the partner team promptly.
Triangulation across sources
Line up interview findings against CIM data, analyst reports, and customer surveys. Where two or more data points converge, you gain confidence. Divergence signals areas needing a second or third expert. Many funds schedule interviews in pairs to reduce single-source bias.
Quantify the impact
Translate qualitative statements into model levers. If the expert claims that a new import tariff could compress industry margins by 150 basis points, adjust gross margin scenarios accordingly. Document the logic so that the investment committee can see the direct trail from voice-of-market to Excel cell.
Feed the investment narrative
Use expert quotes (attributed anonymously) in your deck. A line such as “Former COO, top-three competitor: ‘Demand is softening faster than reported’” carries weight. It shows rigorous outreach and underpins your recommendation, whether to proceed, renegotiate price, or walk away.
Frequent pitfalls and how to sidestep them
Over-professional networking: picking thought-leaders who have not touched operations in years. Solution: prioritise operators with recent P&L ownership.
Leading questions that anchor experts to your thesis. Remedy: phrase prompts in neutral language and allow divergence.
Mini FAQ on PE industry expert interviews
Question | Answer
|
|---|---|
What is the ideal timing within a diligence timeline? | Most funds slot the first call immediately after the initial management meeting, then follow up with a second wave once the data-room model is live. Early insight guides which datapoints to request. |
How many experts should we interview? | Three is common for a middle-market deal: one for high-level macro, one competitor, one customer channel perspective. Complex cross-border deals may require five or more. |
Can we record calls? | Yes when the expert consents. Always mention the purpose is internal diligence. Some funds prefer a professional notetaker when recording is impossible. |
How do we handle potential conflicts? | Ask the expert to confirm no ongoing advisory work or equity holdings in competitors. A compliance screen (standard in the Hiros process) protects both parties. |
What if the expert contradicts management data? | Treat it as a signal to dig deeper. Cross-reference with additional experts or third-party market studies before adjusting the model. |
Final take-away
A well-run industry expert interview is not a box-tick exercise; it is a lever that can tilt a deal toward conviction or caution. By defining clear objectives, choosing the right voice, and weaving insights back into your analysis, you sharpen your investment edge while keeping diligence efficient. When timelines compress and stakes rise, our team at Hiros stands ready to source vetted specialists and shepherd the conversation so that you move from hypothesis to hard evidence faster. Explore how we partner with funds on every step of the diligence journey by visiting our dedicated page for private equity.