UK online investment platform SyndicateRoom has published The Due Diligence Guide for Investors, a document which aims to empower investors to make more informed choices when putting together their portfolio of early-stage investments. The guide, which has been created in collaboration with long-standing equity crowdfunding commentator Rob Murray Brown, educates on the importance of due diligence and emphasises the steps investors should take before making the decision to commit capital to a young company.
“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.”
Brown has gained notoriety through his blog by highlighting perceived good and bad practices and from his sharp criticism of certain industry players. Brown aims to use his experience and “forensic” approach to conducting due diligence, filling the guide with tips and case studies.
“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.”
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Due diligence covers all aspects of business – past, present and future; it is not simply about reviewing accounts filed at Companies House. By making multiple checks using varying information sources, investors can build a clearer picture of the business and team in which they are investing. The Due Diligence Guide for Investors guides the reader through the five commandments that SyndicateRoom believes all investors should follow during the process of checking a company’s credentials:
- Never take anything told at face value
- Always do your own research – never rely on a third party
- If one aspect is being heavily promoted then it is usually masking something else
- Always cross check facts and claims from as many different sources as possible
- When possible, meet with the founders face to face
SyndicateRoom works exclusively with high-net-worth and sophisticated investors that understand the risks of investing in early-stage businesses, and has aimed to take a transparent approach for its members since the company was founded in 2013. At this writing over £103,979,800 has been raised by the platform. The campaign for Fashion On Screen’s Will went live on the platform earlier this week.