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Most institutional investors are familiar with the due diligence process as a standard part of their deal flow. It allows investors to fully understand their target companies, key personnel, and the overall health of the operation before beginning a long financial relationship.

The due diligence process pulls together data from various sources on the target company and key personnel. The goal of the due diligence review is to piece together all of this data to paint a holistic picture of the business and its people.

The investors in charge of the due diligence process review and decide if anything was disclosed or discovered in the process that changes their initial opinion on a deal.

For example:

● Do founders and key persons have the experience they claim?

● Have their backgrounds, education, and stories been exaggerated?

● Are there corruption, fraud, or other legal risks that could affect the business?

● Are there reputational or operational issues hidden in social media or subscription media?

These are typical of the questions that will arise during the due diligence review.

Oftentimes, due diligence is boiled down to a simple background check on founders or key staff members of a target company. While this lends a healthy start to the process, many factors that can affect the deal are left unresearched, leaving investors exposed to unforeseen risk. Here are some focused areas that investment due diligence should include in addition to standard background check data, to properly vet potential investment opportunities:

  1. Social Media Analysis

As social media has become an essential part of a brand’s online presence, performing a social media review as part of due diligence has also become essential. Sites like Twitter, Facebook, LinkedIn, Youtube, and Instagram have a wealth of information on the company’s products, services, and general conduct.

Use a systematic approach to optimize social media due diligence before investing in or acquiring a business. Even legal and insurance claim investigations should include a social media review.

  1. Subscription News and Media Research

The negative reputation of a founder or other key personnel can hobble an otherwise strong business plan. These associations can also reveal a pattern of misconduct in some cases. By indexing various news sources and media chatter, investors can get a sense for company values and reputation, as well as founder and employee media presence.

  1. People Verification

One of the simplest details in conducting accurate due diligence is confirming you have information on the correct individual or entity. Simple details such as previous contact information, addresses, previous associates and other connection information can ensure you are researching the right person or people as well as verify who they are and their claimed credentials.


VERAFI’s mission is to change how the world invests. An intelligent platform that combines AI with human intelligence, VERAFI goes beyond traditional due diligence to give you a competitive edge. Our platform is the first to intelligently aggregate, analyze and synthesize all relevant due diligence data in one place. We combine community sourced and corporate data to provide investors with valuable information that helps them make better decisions, faster.

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