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Doing Your Private Equity Due Diligence – Exhaustive Public Record and Database Research

Within the investment community, due diligence is an accepted norm. However, companies often overlook the importance of conducting thorough background checks for executives of interest. In every walk of life, success is often a byproduct of the people, or entity, chosen to invest in. A company’s management team can be one of its most critical assets. While there is a near-unlimited source of online information, it is not enough to tell the whole story about a person’s background.

Intelligence analysis and the right type of investigation guides equity due diligence practices. At the corporate level, companies like Corporate Resolutions provide background checks for executives on the global stage, and also provides due diligence for private equity concerns. The company hires professionals like former FBI, CIA, and federal agents who possess the knowledge and experience to gather background intelligence. Their reports are clear and precise.

Conducting a background check on private equity begins with comprehensive research techniques. It requires an ability to connect complex dots and people with skills to analyze information that may arrive in data dumps. This involves a very rigorous process of dissecting data.

Steps any company should take:

  1. Risk tolerance checks allow investors to determine if a business is making or losing money.

    2. Equity due diligence, with respect to a business, demands a thorough understanding of a company’s business model. Expect deep digging. If the answers do not make sense, investors will walk away.

    3. What is the company’s market potential? What are market trends that can affect the company’s bottom line? Equity performance checks also depend on factors that are regulatory, economic, and demographic.

    4. Where are all the competitors? How does the company rank in the market with respect to projected growth, pricing, market share, and structured costs?

Effective executive background checks can uncover regulatory problems and hidden criminal histories. Additionally, due diligence will become even more commonplace as federal regulations tighten down on the investment industry. Editors, analyst, and search experts all work in tandem to clarity their findings. Then, they provide their information to clients so that they can make a well-informed decision about a hiring or potential investment.

There is always information about executives, investors, and company founders. However, that information can be difficult to uncover. Sometimes, information can surface about a deal that kills it for an investor. It might be criminal behavior, fraud, or some type of regulatory concerns. In any event, the right information can change a deal’s perspective and open up doors for restructuring it.