What are the five commandments for an effective due diligence? According to Investment platform SyndicateRoom, which has recently announced the launch of a new guide compiled with equity crowdfunding expert Rob Murray Brown, they are:
1. Never ever take anything you are told at face value
2. Always do your own research – never rely on a third party
3. If one aspect is being heavily promoted then it is usually masking something else
4. Always cross check facts and claims from as many different sources as you can
5. Where possible meet up with the founders face to face – ECF platforms usually arrange investor evening.
I have spent the last five years researching the phenomenon that is equity crowdfunding, stated Brown, equity crowdfunding consultant. I know the way the market operates, and I know the pitfalls that await investors who have not carried out their own due diligence. By reading this guide, investors will be better informed and better prepared to sift through the information presented, and make secure judgements about what is fact and what is fiction. This will give them a much better position from which to view their investment decision, Rob Murray said.
The importance of conducting proper due diligence has been at the core of SyndicateRoom’s ethos since the company’s inception four years ago, commented SyndicateRoom Co-founder Tom Britton. Investors need to take the time to review and consider each opportunity. Our investor-led model gives members a head start on this, as a professional investor has already conducted their own due diligence on the opportunity before it goes live, but it’s crucial for the individual investor to conduct his or her own reviews, too. At SyndicateRoom we believe that instilling a culture of due diligence within our community will bring greater transparency to the industry as a whole.
Find out more here.