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A private-equity investor argues for scrapping the standard three to six month adversarial due diligence process. Instead, do paid work with the entrepreneur first, prove you add value, then decide on a longer partnership.
A private-equity investor argues for scrapping the standard three to six month adversarial due diligence process. Instead, do paid work with the entrepreneur first, prove you add value, then decide on a longer partnership.
Let's do business together. Before we do business together, I don't like the idea of, you know, we're a private equity company. We're going to make this massive investment in you. We're going to do three to six months of due diligence. We're all going to jump through 15 billion hoops. We're going to kind of hate each other by the time it's done. Anybody, by the way, who's sold anything to private equity, give me an amen. Because, you know, that's exactly how it is. I've been on the other side of that. I've sold enough companies of private equity to know it's not really the foundation for a great long term relationship, even if it goes well. And so our model, our methodology, we just wanted to flip that on its head and say, let's work together with entrepreneurs. Let's do the type of work that we would do if this were a due diligence scenario. Let's get paid to do it because we're delivering tremendous value, because there's no obligation on their end to continue working with us or to give us any other company. But then at the end of it, yeah, we have an opportunity to say, hey, does it make sense for us to work together?
