$90 Trillion in Assets Will Change Hands – the Bottleneck Is Due Diligence

01 /The Concept

Every startup should be so lucky as to have to deal with due diligence headaches – because it means a serious buyer has signed a term sheet and is spending their own time and money on a final verification before closing. Due diligence is typically the last gate between a signed LOI and a completed acquisition.

But the process is genuinely painful for everyone involved – it consumes enormous time, energy, and nerves on both sides of the table.

Clarum is using AI to make due diligence dramatically faster and less miserable.

The workflow is straightforward: a buyer imports the documents provided by the seller – financial statements, investor decks, customer and supplier contracts, operational playbooks, and anything else relevant – into the Clarum platform.

From there, the buyer can ask the AI any question about the business being acquired. Every answer comes with citations pointing back to the source document, table, or chart from which it was drawn.

For professional acquirers who deal in volume, the process is even more efficient: they typically have a master due diligence checklist. They can hand the entire list to Clarum's AI and receive a structured document with answers to every question, automatically sourced and formatted.

Clarum just graduated from Y Combinator, receiving the standard $500K in funding. The company was founded in late November of last year.

02 /Why It Matters

Interestingly, the same Y Combinator batch produced another startup tackling the same business acquisition market – but from a different angle.

Before Clarum is useful, a buyer needs to find the right business to acquire in the first place. That means working through a long list of candidates to identify which ones are even worth a closer look.

Today this is done manually. Even professional acquirers top out at around 100–150 companies per week for initial screening – but finding a single viable acquisition target typically requires reviewing around 10,000 companies. Add in the time for discussions and due diligence, and even a small-business acquisition can take 18–24 months from start to close. The time and money costs are enormous.

Clarum is automating the due diligence end. OffDeal is attacking the front end: using AI to identify acquisition candidates.

Using the web and open data sources, OffDeal lets buyers build a preliminary target list based on a defined set of criteria – industry focus, geography, estimated revenue, headcount, customer profile – and then filter and sort that list in minutes rather than days or weeks.

Once a shortlist is ready, the buyer can even instruct the platform's AI to send personalized outreach emails to every company on the list – and then focus energy on the ones that express preliminary interest.

Why did two startups focused on business acquisitions end up in the same Y Combinator batch? The short answer: buying companies is its own category of business, and a profitable one. Acquiring small regional operations is one of the cleanest paths for growth-oriented companies to expand their geographic footprint. But the deeper driver is a generational wealth transfer now underway globally and will continue for at least the next 20 years. Aging business owners are selling or handing businesses to successors at an unprecedented rate.

Some research estimates that assets worth $90 trillion will change hands in the US alone over the coming years.

This isn't distressed-asset activity. Owners aren't selling because their businesses are failing – they're selling because retirement has arrived. The businesses are often healthy; the owners simply need an exit.

Already, 51% of US business owners are over 55. Another 41% are between 35 and 54 – meaning even the youngest of that cohort will be thinking about exit planning within a few years.

Clarum and OffDeal are building tools to streamline what happens when a buyer and a willing seller find each other. But there are other exit paths too – and startups targeting those:

- Teamshares (a related review) buys companies outright and transfers 80% of equity to an employee trust over 20 years. They've raised $245M.

- Common Trust (a related review) doesn't acquire businesses itself – it helps owners quickly transfer ownership to a trust held by employees and even customers. They've raised $2.6M.

And then there are the consolidators – companies building dominant regional or vertical positions by buying up local operators:

- Platform Accounting Group (a related review) onboards small accounting firms onto its centralized platform and then acquires the ones that successfully integrate. They've raised $85M.

- Pipedreams (a related review) takes the reverse approach – buying local HVAC companies first and then integrating them onto a centralized operating platform. They've raised $35.7M.

03 /Opportunities

Technologically, neither Clarum nor OffDeal is doing anything novel. AI-powered enterprise knowledge bases (what Clarum is, essentially) and AI-assisted B2B lead prospecting (what OffDeal does) are both well-established categories with many players.

What's distinctive is the niche they chose to apply those technologies to. That's actually a promising framework for building AI startups right now: instead of building a better technology, find an application domain where the technology hasn't yet landed in force.

So one direction to explore is identifying these "unusual" application domains for AI – specific types of business activity or operational tasks where AI could save serious time and money, but where no one has shown up yet.

The second direction is simply entering the business acquisition market, which is structurally set to grow for the next two decades.

There are multiple entry points and business models to consider. One of the most straightforward is selling tools to the people doing the digging – a pick-and-shovel play. That could mean building something analogous to Clarum and OffDeal, or even combining both into a single end-to-end platform.