Claims of competitive advantage in investment memoranda and acquisition targets are nearly universal—yet despite the proven power of economic moats to indicate and drive investment returns, most Commercial Due Diligences either ignore the subject or treat moats as binary states rather than the dynamic forces they are.

This four-part series provides a comprehensive framework for private equity investors and strategic acquirers to systematically test whether a TargetCo's competitive advantages are compounding or eroding, and to supercharge investment decisions.

044, Part 1: The Returns Case and Framework

Wide-moat companies outperform the S&P 500 by 2.4-6.6% annually—yet most Commercial Due Diligence treats moats as binary checkboxes. Part 1 reveals why genuine competitive advantages drive dramatically superior returns for private equity investors and strategic acquirers, profiles legendary investors who built fortunes through moat-focused strategies, introduces the Compounding vs. Defending framework, and demonstrates how Danaher Corporation systematically identifies and enhances its moats, creating differentiated investment returns for owners. Read the full piece here >>>

044, Part 2: Matters Graph's Seven Moat Commercial Diligence Diagnostic

"Strong customer relationships" and "high switching costs" appear in nearly every CIM—but how do you test if these moats are real? Part 2 presents seven systematic tests, each with detailed Voice of Customer questions, for private equity investors and strategic acquirers. Learn how to pressure-test switching costs, brand equity, network effects, data advantages, ecosystem lock-in, cost leadership, and distribution moats—with company examples including Salesforce, HubSpot, Visa, and Sysco. Read the full piece here >>>

044, Part 3: Measuring Moat Strength—A Practitioner's Guide

VoC questions are only as valuable as the measurement framework applied to the answers. Part 3 provides a practitioner's guide for quantifying moat strength across each of the seven tests, establishing comparative benchmarks against competitors, and translating qualitative customer feedback into investment-grade analysis. Essential methodology for Commercial Due Diligence teams. Read the full piece here >>>

044, Part 4: Moat Dynamics and Investment Decisions

Not all moats are created equal—and some are quietly decaying while management celebrates retention metrics. Part 4 covers moat stacking, migration, and the anti-moat concept. Plus: a practical guide for evaluating whether investment committee memos have sufficient moat evidence, and an investment-grade checklist for Commercial Due Diligence. Essential reading for private equity investors and strategic acquirers. Read the full piece here >>>

The promulgated guidance in the series emphasizes and provides detailed instruction for a customer- and decision-maker-driven perspective as the primary tool for validating moat claims during Commercial Diligence, as the moat TargetCo describes matters far less than the moat customers experience.

Mark Stein is authoring an upcoming Best Practice Brief detailing how to determine what value-gen activities and budget support are required during the hold period to maximize an asset's value and enable the largest investment returns.

Additionally, Mark Stein is authoring a forthcoming brief that provides a framework for determining which assets in a PE Fund's portfolio should be sold and by when, using moat-strength evaluation to optimize a Fund's performance and returns to LPs and GPs.

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