Trust But Verify: Smarter Due Diligence Questions | Niche Investment Strategies (Ep. 6)

What makes investors commit and what makes them hesitate?

This segment reveals the smartest due-diligence questions allocators use before investing and what capital raisers can do to prepare.
Learn to verify track records, confirm alignment, and demand real “skin in the game.”

This clip was taken from the Niche Investment Strategies Panel, filmed live at our Family Office Club Super Summit.

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Transcript

Welcome to the niche investment strategies panel series. In this discussion, the
speakers share the smartest due diligence questions serious investors ask and how
capital raisers can prepare to answer them. And from an investor standpoint,
what advice do you have for private investors who are here today, who might like
the niche that you're in, who are vetting several groups like yours, what are some
of tough industry curveball questions that you could,
you know, suggest to the investors to ask the prospective investments?
You could start, yeah, sure.
Quick recap on that one? Well, just what is,
for the investors that are here, In your case, it would be kind of, what would be
a question that they should ask companies that would either represent you similar
industries? Do your homework. Check their track record. Have they done it before?
Have they had success in it? You know, how long have they been operating in it?
Is it a grand idea and makes all the sense? Because I think Richard said earlier,
you can put anything on paper. And I've been telling my investors that for years. A
pro forma is just somebody throwing their numbers in there. But you really want to
bet on the jockey, not the horse, and make sure that you've got a track record.
You've got some referrals. You've got people that you can go to and talk to them
in order to make sure that you're backing an investment or an opportunity that has
a reasonable amount of success. Will that operator, that capital raiser, that partner
or whoever go to bat for you if something goes wrong do they have skin in the
game um you know there's a lot of people out to raise in capital for their you
know their projects and their companies and things like that and they haven't
invested a single dollar themselves i'm a seven -figure investor i own shares in all
my partner's operations so those are some things to just really do your homework on
trust but verify Richard? Yeah, I can go next real quick. Yeah, definitely agree
with the pro forma, right? You can solve world peace in a spreadsheet if you wanted
to, right? So I think trusting your gut, if you don't understand exactly how they
add value, then just move on right away. It's their job to make that clear to you.
If you're not clear, that means that they're probably not clear. And I would just
move on quickly. Also, I think that you should have really high conviction. It
should be so unique and so much better And you really like and know and trust the
person, but also the idea just needs to be night and day better than everything
else. And then you always want to walk it in person, see their team in person,
walk the manufacturing floor, and not do your due diligence from a distance.
This insight comes directly from the niche investment strategies panel, recorded live
at our Family Office Club Super Summit. For access to our investor community and AI
Power Tools, visit us at family offices .com.