A short YouTube advice clip by Jayson Lowe presenting a four-point due diligence checklist for investing: (1) understand the investment, (2) evaluate who is running it/leadership, (3) confirm the business is profitable and leaders know the numbers, and (4) verify the business has cash generation and positive cash flow. Lowe emphasizes cash generation and cash flow as non-negotiables before investing.
What is my due diligence checklist for investing? Number one is, do I understand it? Because if I don't understand it, I'm not investing in it. Secondly, who's running it? Who's in a position of leadership to steer the direction of this? If it's a business investment opportunity, for example, and then thirdly, is the business in profit? And if so, do the leaders of that business really know the numbers? Those are the three primary things for me. Now, if I was to add a fourth, it would be trusting, but verifying that the business has cash confidence. There's only two things that are going to sustain a business regardless of what business it is, and that is generation of cash and most importantly, cash flow. And so that would be, for me, my non negotiables as part of my checklist before considering investing a dime in whatever that opportunity may be.
