Here is a really simple way to reduce risk in your dealmaking: do a background check on the other party.

Buyers and sellers should do one on each other.
As should investors and entrepreneurs.

Let me tell two stories I heard recently where a background check caught something big in a private deal:

- A VC I know was doing diligence on a seed-stage business. Everything looked promising. They had strong founder-market fit, traction, and a clear reason to win. Then they ran a check on the founder and he had a bankruptcy on their record. Maybe it still could have been a good deal, but if it flopped and their LPs found out... could have been a nightmare.
- A friend of mine was an analyst at a real estate PE fund. After a few months of diligence on a syndication deal, he was down to one of the last items on his checklist, a background check on the GPs. As he said, "9/10 nothing came up". But that one time? Turns out the GP on the deal had a murder on their record. What made it worse was the other partners in the deal didn't know this either. Red flags everywhere here.

Before you get into a deal involving millions of dollars and years of your life with someone, take the time to do a basic check.