When conducting investigations, primarily background checks and due diligence investigations,professional investigators find that they are one part of a larger team. The team is usually driven by outside counsel who are joined by accountants and or investment analysts and periodically a banker or two. This all makes sense, with each having their own role, and the professional investigator is the perfect fit to address those non-financial elements that need to be verified, uncovered or quantified. “Reputational” due diligence concerning not only the businesses reputation, but also the key players and owners is the perfect place to deploy the professional investigator.
Sadly, as more of the other M & A team members subscribe to records databases, the more they fancy themselves as actual investigators. They take information presented in those databases and rely on it as gospel. Their can also be a sense that these databases are so good that they are an actual investigation all by themselves. This is where things get dangerous. Those databases are a great tool, even a good starting point, but the are far from accurate or complete and they lack much of the meaningful, significant information that tells the real story.
Get the whole story, not the due diligence fairy tale
Due diligence is as much an art as it is a science, and clearly data in databases, even those labeled as “investigative”, is deeply rooted in the science camp. Reliance on same is truly way to short change your due diligence in terms of accuracy and completeness. It also increases the risk of both making or passing on an investment while taking on a false sense of security. It seems to fall under the “action taken, confidence instilled” concept rather than reality.
Not only should any M & A due diligence team include the use of a professional investigator, it should include the “right” professional investigator. For more information about how expert professional investigators can help protect your investment decisions, please contact one of our team at (855) 997-2800.