Deepening Your Due Diligence Procedures

April 20, 2024

I talk to and meet close to 500 entrepreneurs a year – from the true maverick game changers to the guys as arrogant and dumb as can be.

I believe what differentiates a killer entrepreneur from the rest of the crowd is frankly the depth of their due diligence followed by how they execute

Business after all is WAR and if you haven’t properly done your due diligence you are bound for dismal failure

I thought I’d share with you some of my thoughts in this regard.

1. Don’t invest in something you know nothing about as most people do. Typical recipe for failure. If you have spent your networking years well you should know at a number of people in the industry that can advise you properly. Listen to them closely but don’t take any advice from someone who has not made it in the asset class you are considering investing into big time.

2. When doing your due diligence, always “Trust but Verify” to strike a balance between being too skeptical and too trusting. Being overly skeptical and suspicious can lead to missed opportunities, misunderstandings, and strained relationships. On the other hand, being too trusting and gullible will lead to being taken advantage of, making poor decisions and have a direct relationship to your exit strategy.

3. Learn how to gather “intel”. It is the essence of it all. Due diligence is an essential process for anyone considering investing in or partnering with a company. It involves a comprehensive review of the institution’s financial, and operational performance to identify any potential risks, red flags, or areas of concern.

4. Never let your company’s decision making process be run by advisors. Take their opinion but never rely on them. They have their own agendas.. I personally use a list of a number of touch points in my due diligence process which covers the essential information that I need to understand the people’s character, transaction(s) potential for growth, the path to an exit strategy and the anticipated ROI.

5. The extensive due diligence process that I employ identifies financial threats, regulatory perils, legal threats, and reputational hazards to name just a few of the touch points on my list. It is the sine qua non imperative to evaluate the financial performance of an institution, including its revenue, profitability, and cash flow.

6. Last but not least is the evaluation of the product or service’s compliance with regulatory requirements, legal obligations, and ethical standards as non-compliance with these regulations can result in significant legal and financial consequences, including fines and reputational damage.

And this is only for starters.

Come to the Financial Policy Council https://lnkd.in/eZU2UgYd, be a part of decisions that will shape the country’s future & share your thoughts.

Financial Policy Council
Brain Expansion Group
Raoul Davis
Stanford Silverman
Roger Archibald, Esq.

#duediligence
#smartinvesting

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