Diligence — Overview & Concepts

Diligence gives each deal you're formally evaluating its own workspace — somewhere to collect documents, run Cairn Intelligence against them, track a checklist, flag risks, and manage outside advisors, all in one place.

What problem it solves

Diligence usually means a data room of hundreds of files, a checklist in a spreadsheet, red flags in email threads, and an investment memo written from scratch the night before IC. The hardest part is trusting that every claim in the memo is actually in the documents.

Feature	The problem	What Cairn does
Workspace	Documents, tasks, and concerns for one deal live in different places	One workspace per deal: documents, checklist, red flags, and advisors together
Checklist and red flags	It's unclear what's been checked and what's still open	Track each item's status, and record each red flag with a severity
Financial Extraction	Someone reads every document to find ARR, growth, margin, and burn	Cairn Intelligence pulls those metrics out of your documents
Cairn Thesis	Strengths and risks are summarized from memory, and assumptions go untested	Findings and assumptions, each cited to an exact quote, with each assumption marked supported, contradicted, or not established, plus bear/base/bull scenarios you control
Investment Brief	Before a first partner conversation, nobody has time to read the whole data room	A short, cited read of your documents: strengths, risks, observations, and the questions to ask next
IC Memo	The memo takes days and repeats work already done	A full draft IC memo built from your Thesis, Financial Extraction, and documents, exportable to Word
Cited quotes	AI summaries can invent facts	Every claim must quote your documents exactly. If a quote can't be found, the result is rejected, not saved

The examples below use a made-up firm and companies to show how each feature is used.

Example: testing a growth claim. The Lumen Health deck says "ARR grew 3x last year". The team uploads the deck, the 2025 financials, and the customer list. Financial Extraction finds ARR of $6.1M and growth of 140%. Cairn Thesis lists the assumption "ARR tripled in 2025" as contradicted, quoting the financials' line showing $2.5M to $6.1M. The analyst records a medium red flag, "Growth overstated in deck", and sets the bear case to 60% growth. The IC Memo drafted from all of this carries the same quotes, so every number in front of IC can be traced to its source.

The workspace list

Every diligence workspace you've created is listed with its company name, when it started, how many documents are uploaded, how many red flags are open, and how far its checklist is complete. Each workspace also has a status: Active, Complete, or On Hold.

The workspace layout

Opening a workspace shows five tabs:

• Overview — a summary of the workspace at a glance: completion percentage, document count, open checklist items, red flag count, how many advisors are engaged, a condensed financials snapshot, and the latest IC Memo's recommendation, if one has been generated.
• Documents — upload documents into categories (Financial Statements, Legal, Cap Table, Management, Market Analysis, Technical, or Other), browse everything uploaded so far, and preview a selected document without leaving the workspace.
• AI Analysis — Cairn Intelligence's four features for this workspace, chosen from the menu at the top: Cairn Thesis, Investment Brief, IC Memo, and Financial Extraction. See Key terms below for what each one does.
• Checklist & Flags — your diligence checklist and your red flags.
• Advisors — outside firms (legal, financial, technical, etc.) engaged for this deal.

Key terms

• Workspace — the diligence process for one deal, containing its own documents, checklist, red flags, advisors, and Cairn Intelligence outputs.
• Cairn Intelligence — the product's AI features. Every claim Cairn Intelligence makes about your company is backed by an exact quote from one of your uploaded documents — it never cites something that isn't actually in the text you gave it. See How-Tos & Workflows for how to generate each one.
• Financial Extraction — Cairn Intelligence reads your documents and pulls out ARR, revenue, growth, gross margin, NRR, burn rate, runway, and headcount. One result per workspace; regenerating replaces it.
• Cairn Thesis — a cited investment thesis: strengths, risks, and observations from your documents, material assumptions with their evidence status (supported, contradicted, or not established), and bear/base/bull ARR scenarios you control. Thesis is versioned — every regeneration keeps the prior version, so you can look back at what the thesis said before.
• Investment Brief — a quick, cited read of your documents: strengths, risks, and observations, each with the exact quotes behind it, plus questions to resolve with management. One brief per workspace; regenerating replaces it and keeps your analyst notes. Downloadable as a PDF.
• IC Memo — a full Investment Committee memo synthesized from your Cairn Thesis, Financial Extraction, and documents: executive summary, thesis narrative, market, financials, management assessment, risks, comparable companies, valuation, and a recommendation. Exportable to Word (.docx). Like Thesis, IC Memo is versioned. Generating one requires a Cairn Thesis and a Financial Extraction to already exist for the workspace.
• Red flag — a risk or concern you've identified, with a severity of high, medium, or low.
• Checklist item — a task or question to resolve as part of diligence, with a status of not started, in progress, complete, or not applicable.
• Advisor — an outside firm engaged to support the diligence process.