The ability of the investor to channel their inner DCI to gain information before selecting an investment is known as Due Diligence. It is the comprehensive investigation into the business and affairs of an individual or company, including financial history, current performance, risks and future prospects.
Before you invest, you must be aware of everything that goes on within your chosen industry. You need to know who you’re dealing with and where they’re coming from. A due diligence process will help you gain this knowledge.
Here are some tips to consider in the Process:
- The first step is gathering information about the business/industry on which you plan to make an investment decision. This includes researching the company’s history and its management team.
- In addition to investigating the company itself, it’s equally important for potential investors to investigate other aspects related to their investments such as any third parties involved in their business transactions (for example, suppliers or investors). This may involve contacting them directly for more information about their relationship with the company.
When should I start doing my due diligence?
As soon as possible! Ideally, it would start when you first conceived of the idea for your business and continue throughout all stages of development until launch day arrives.
For these and more tips, feel free to download the due diligence document available.
Cheers to your successful investing!