Due Diligence Background Check

Corporate Private Investigations Solutions for Investment Firms – VC, PE and Private Funds

Partnerships and investments represent substantial opportunities for a business, but they also represent a potential increase in the legal and ethical ramifications. The experts at Justice Solutions Group provide a comprehensive set of solutions tailored to each client’s needs.

A background check is a necessary step for due diligence. Our team of trained investigagors ensures that each search meets state and federal requirements, including compliance with the Fair Credit Reporting Act.

Due diligence background checks are designed to provide companies with an in-depth understanding of people or entities they are partnering with as well as knowledge about where they are investing funds and resources.

Due diligence background checks are intensive. They are used as a risk mitigation tool when a corporate or business entity is deciding whether to move forward with an investment or partnership. Performing a due diligence check can serve as a fraud prevention tool and acts as a shield from undue liability exposure.

Common reasons that due diligence background checks are performed before investments or partnerships include:

• Mergers and acquisitions—a due diligence check plays a crucial role in providing insights into another company, its executives, officers, and key personnel.
• Vendors—a new supplier can improve the everyday operations of a business, but adding new vendors also increases exposure. A background check can give you essential insights into the reputation of a vendor.
• Partnerships—launching a business with another person or entity requires that you closely examine the said potential partner’s financial and reputational history.
• Investments—an in-depth understanding of the principals involved in new investments are prudent. Fulfilling due diligence may also be a matter of regulatory compliance, including licensing, litigation, and disciplinary history before investing.
• Venture Capital Firms have an obligation to protect investors from risks that can be mitigated with due diligence. A background check on the founders of a start-up is essential to meet the legal standard of due diligence. It should include criminal, educational, and employment history for all founders of a potential investment.
• International Operations—expanding your business or investments to the international stage can be an exciting opportunity, but it is not without risks. Doing business with individuals or entities located in foreign countries requires an international background check capable of investigating global banking, foreign court systems, and compliance with international regulatory bodies.
• Compliance with regulatory bodies—numerous regulatory bodies require due diligence prior to investment, partnerships, or alliances with other entities.

Our due diligence checks are customized for each client, and we will work with you to ensure that the background check meets the legal standard for due diligence to help you avoid liability for failure to perform due diligence.

Red flags that serve as a warning to proceed with caution or back out of the investment or partnership can include things related to:

• The legitimacy of a business or person—do they have the finances, education, credentials, or experience claimed?
• Has the individual or company been involved in past allegations of corruption or fraud?
• Have they been the subject of suspensions, investigations, legal actions, or adverse publicity?
• Do they have the capacity they claim to have, such as personnel, assets, and resources?
• Are the executives, owners, or officers involved in any ongoing litigation, investigations, or other problems that could affect your interests?

It is crucial that a background check is thorough enough to catch things that might otherwise slip by unnoticed while tailored to the requestor’s needs. The scope of the background check should reflect the size of the deal. For a relatively small investment, you may only need a preliminary screening. For substantial investments or partnerships, a customized background check complete with enhanced screenings is appropriate.

Law Offices, Venture, PE & Corporate Clients:

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Real Estate, Investments, Venture Capital, Hedge Funds, Acquisitions, and Partnerships

Transactions of any size and partnerships are healthier when there is peace of mind for all involved parties. The professional investigators at Justice Solutions Group will provide you with the information you need to know to mitigate risks. Our team members will help you determine the significance of any red flags and serve as advisors if needed.

Our investigators can help you decide what parties warrant a reputational review and how in-depth the review should be. When entering into an investment or partnership, knowing the reputational history of other involved parties is crucial. A reputational review of potential parties builds a picture of the involved parties’ overall reputation. Proceeding cautiously in involvement with entities with a less than stellar reputation is a powerful tool to protect the reputation of your own business.