General · Global
What good due diligence looks like
The questions a thorough review should answer before an opportunity is shared with clients.
Summary
Good due diligence tests the sponsor, the strategy, the documents, the numbers and the structure, and records what was checked, what was not, and why.
- Check the people and their track record, not just the pitch.
- Read the legal documents and understand who gets paid first.
- Write down open questions and unverified claims.
How do you assess the sponsor?
By checking track record, team, regulatory standing, conflicts and references.
Look for experience in the strategy, stability of the team, how the sponsor has behaved when things went wrong, and whether its interests align with investors'. Independent references and public records help.
How do you test the strategy and numbers?
By testing assumptions, comparing with evidence and asking what would have to be true for the plan to work.
Ask for the basis of projections, stress cases, and how results have compared with earlier forecasts. Check how valuations are set and how often. Treat targets as aims, not promises.
What should be read in the legal documents?
Who holds legal rights, how money flows, what protections exist, what fees apply and how investors can exit.
Pay attention to ranking and security, voting and control, conflicts, information rights, the fee structure, and what happens in default or dispute. Have qualified legal advice where needed.
How should the review be recorded?
In a consistent file that shows what was checked, the evidence, and what remains open.
A written record helps the adviser explain a decision later and supports suitability assessment for each client. Multiplier is a technology platform and does not do this assessment for you: responsibility for suitability stays with the regulated adviser.
Frequently asked questions
Does the platform do due diligence for me?
No. Information on the platform supports your own review. Responsibility for suitability remains with the regulated adviser.
What is a red flag?
Examples include unclear ownership, unexplained fees, reluctance to share documents, aggressive projections and weak governance.
How long should it take?
As long as needed to answer the questions properly. Rushed reviews are themselves a risk.
Should I use independent experts?
For complex matters, often yes, such as legal, tax or valuation specialists.
This article is general information for eligible investors. It is not investment advice or an offer. Capital is at risk. See our Terms and Risk warning.
