As businesses grow in size and value, the importance of conducting a due diligence background check related to new partnerships, key transactions and senior-level personnel grow, too. At Business Screen, our clients often choose to conduct a due diligence background check when:
It’s easy to understand the motivation behind a due diligence background check. Any company and any business owner would want to know as much as possible about individuals and entities that will be important to operations moving forward. But what does a due diligence background check reveal? Here’s a look at what you find from conducting a due diligence background check, as well as hit rate statistics drawn from our own experience.
Due diligence background checks are performed on both individuals and entities. For example, if your business were considering a major acquisition, it could conduct investment due diligence and run background checks on the owner of the other company and the other company itself.
Types of records found in our reports
Types of cases identified through due diligence
Of course, the information included in these records would be material to any company considering a merger or acquisition, a major investment, or a key relationship with an individual or entity.
How often do we find something when conducting a due diligence background check? Here are the statistics, broken down by individuals and companies:
To put this into context, imagine your company is considering the acquisition of a start-up competitor. You choose to conduct a due diligence background check on both the founder of the company and the company itself. There’s a 20% chance (about 1 in 5) that you’ll discover a record from the list above related to the founder. That’s like rolling a die. And there’s a 15% chance (about 1 in 6) that you’ll discover a record from the list above related to the company. For most owners, executives and companies, those statistics and odds are enough to compel them to move forward with a due diligence background check.
Not every company chooses to conduct a due diligence background check during key transactions and decisions. Those companies expose themselves to a series of risks and dangers, including:
There are other risks and dangers in not running a due diligence background check, but the ones listed above are the most common.
Not every record that might emerge from a due diligence background check should thwart a deal or partnership. Think of a background check as simply gathering comprehensive information. When your company is about to make a serious investment or enter a key partnership, why wouldn’t it want as much information as possible before making a decision? The due diligence background check records that should make you take action are the ones that can result in the risks or dangers listed above. If a background check uncovers something that could lead to liability, regulatory or compliance issues, financial loss, or damage to your reputation, action is needed.
At Business Screen, we work with companies and organizations that find themselves at a pivotal moment: considering a merger or acquisition, evaluating a new investment, selecting a major vendor, or entering a key partnership. They choose Business Screen because we quickly return the actionable information they need. When you work with us, you can count on:
Contact us to learn more about how a due diligence background check can benefit your business.
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