Due Diligence and Background Checks on Investors

by a searcher from University of Massachusetts at Lowell

2 months ago

General question on best practices. If your planning on taking on an investor or 2 (or more), what kind of vetting are you doing to make sure the Investors has the funds, and that they are above board? Are people doing background checks on these potential limited partners or does it not matter?

Sam

1 like
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7 comments

searcher from Simon Fraser University

Search for them on PACER

2 months ago | like reply | 0 likes

searcher

Good question. Lot of inexperienced BS are posing as investors in order, to get your PPM, your collaterals, to even learn if the industry is fit for their own acquisition - they are hustlers. Weed them out early by asking relevant question. Stay in control of the meetings and not let them drive meetings. Next is to check track record, and ask relevant references and do diligently check those references. Any first time investors, take opinion of lead investors they may not be ok with these investors. If the raise is big enough engage firms that do background check. Do not skip this if you want to focus on the deal and not on housekeeping, post acquisition

2 months ago | like reply | 0 likes

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