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.