There are many circumstances where an individual or a business would be best served investigating a private company. Prime examples range from due diligence activities relating to a contemplated investment or loan arrangement with a company, or a business seeking to learn more about an existing or potential vendor or customer, to a legal professional investigating the entity on behalf of a client, and more.
Whatever the catalyst for investigating a company, there are a number of best practices that should be adhered to, ensuring the success of the investigation and the quality of the intelligence obtained, including:
- Look at the Background of Owner(s)
- Look at Company’s Litigation and Regulatory History
- Look at Financials and Assets
- Look at the Business Credit
- Look at their Vendor and Customer Relationships
- Look at Social Media and News
Companies are often a reflection of the people who lead them, so the best way to start an investigation is to look at the owner(s). Ordering reliable reports from a reputable investigative firm detailing issues such as education, work experience (including previous companies operated), civil and criminal background, personal credit, personal assets, and more, helps provide an honest, comprehensive picture of the individual or group running the company.
Legal and Regulatory History
A key part of an investigation into a company involves obtaining legal briefs, court records, regulatory orders, and the like, detailing historical and current/ongoing legal and regulatory matters. This can include employment matters, civil lawsuits, regulatory infractions or any other kind of scenario that displays past misconduct/bad decision making, as well as current legal peril or a ruling/injunction precluding a business from engaging in activities important to their line of work.
Company Financials and Assets
Looking at the financial statements of a company can provide invaluable insight into the profitability of the business, capitalization and debt structure, assets, liabilities, their cash flow situation, management efficiency, and much more. Private companies don’t have to disclose their financials, so it’s harder for an individual or company to gain a clear picture of a company’s finances. Despite that, a reputable investigative company experienced in gathering financial-related intelligence on companies can utilize an array of sources to obtain information ranging from banking accounts (local and out-of-state) info, brokerage accounts, and equipment purchase/leasing agreements, to real estate holdings (property and buildings), bankruptcy filings, company credit, and much more.
Just like individuals, businesses can rely on credit for any number of reasons. This can range from business/travel/entertainment-related expenses, general operations purchases and short term gap-financing needs to supplier/vendor arrangements (payments terms), purchasing or leasing of equipment, and land and structure financing. Looking at a company’s credit report can provide insight as to how responsibly they use credit, the amounts and types of credit utilized, their payment history with creditors, vendors and other companies, and much more.
Vendor and Customer Relationships
To gain good insight into how a company conducts its business with others, it’s important to view their relationships with vendors supplying them with the goods and services needed for operations, as well as how they treat the customers they sell goods and services to.
Media and News
In today’s age of social media and 24-hour news cycles, there is plenty of information available about companies for anyone interested in learning more about them. Be it news, rumors, innuendo and just about anything else, it can be found on the Internet, and more particularly social media sites.
Companies themselves use social media to influence perception, so what they are saying (or not saying), as well as the speed with which they responds to news or public outcries can say a lot about the company. Even the frequency of tweets or Facebook posts can send a message, whether the company recognizes it or not. Any individual or company seeking to investigate a business should most certainly take advantage of the information that is readily available on the web.