Due diligence
Due diligence is the buyer's examination of a business after the letter of intent is signed: its financial statements, contracts, people, legal matters, and operations, checked against what the buyer was told when it set the price.
In a sale
Why can due diligence change the price?
Because the price in the letter of intent rests on what the buyer was told, and diligence is where it checks: a finding it did not expect becomes a reason to lower the price, defer part of it, or ask for more protection. The buyer's accountants run a Quality of Earnings review, its lawyers read the contracts, and its operating team asks how the work actually gets done. An issue the founder found first, and disclosed before offers arrived, has already been priced.
Where it comes up
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The Go-To-Market Analysis (GTMA) builds the file a buyer would build on your business, before a buyer does.