Key benefits of using outsourced experts for due diligence consulting are access to expertise, experience and objectivity. This outsourced expertise can find the issues you need to consider prior to your decision thereby increasing the likelihood of success of your transaction. But how do you find and select a due diligence firm? The following is some context based on our experience:
Finding the right due diligence firm:
Clients find us several ways. Most come to us through referrals or word of mouth. Others have come after hearing us present at conferences. We have gained some clients because we are connected to them in social media, which allowed them to evaluate and learn about us prior to establishing contact. The ways clients find us has shaped our perspective on how companies find a due diligence firm. Clients always find us through trust-based networking. We recommend you use a similar path as you look for a due diligence firm.
Selecting a due diligence firm:
In due diligence teams, trust is the key component. Our strongest recommendation is that you work with due diligence providers that you already know and trust. If you are considering a transaction in an area unfamiliar to you and you need to reach out to a firm that works in a different domain, we have some recommendations for you there as well:
- Since trust is critically important, use your network. Ask peers who they have used in that domain. Also ask your investors or members of the investment banking community, especially those that have experience in the domain you are working in.
- Look for the right expertise. Big acquisitions take a team. Be sure your team has the right mix. (for evaluations of firms that provide enterprise technology capabilities or that work in the national security sector, Crucial Point is without rival).
- Avoid conflicts of interest. You may have very smart professionals in your own company who are familiar with the domain of interest but who have a vested interest in having the decision go one way or the other. The same is true of some outside firms. Ensure the firm you pick has no conflicts of interest.
- Seek firms that can work with you post-transaction. The integration of a firm into your portfolio can be helped by you being aware of information from the due diligence phase, and you will want to work with your due diligence team after transaction on many matters.
- Meet with the firm as soon as you can, so you can evaluate the firm’s potential. In person meetings will give you a feel for their spirit and ability to deliver.
- Find firms that are known for building long-term relationships. This gets right back to the key point. Trust is critically important and when you find a due diligence firm that you trust you will want to keep the dialog going with them, long term.
- Ask for a proposal. A good firm will be ready to produce one on short order.
Questions/comments/suggestions? Please contact us for more information.
Additional Due Diligence Information:
- Crucial Point Due Diligence Services: A summary of our offerings
- Our Technology Due Diligence Process: Our core processes
- Due Diligence in Cybersecurity: Experience Matters
- Due Diligence in Defense, Intelligence and National Security: A specialty
- IT Due Diligence: Analyze target company IT infrastructures, processes and people
- CTO Consultants for Technology Due Diligence: A key focus area for Crucial Point
- How to Find and Select a Due Diligence Firm: Tips from the Crucial Point team