Forward Risk & Foley Webinar: Key Takeaways (Video)

Foley & Lardner


Foley & Lardner LLP looks beyond the law to focus on the constantly evolving demands facing our clients and their industries. With over 1,100 lawyers in 24 offices across the United States, Mexico, Europe and Asia, Foley approaches client service by first understanding our clients’ priorities, objectives and challenges. We work hard to understand our clients’ issues and forge long-term relationships with them to help achieve successful outcomes and solve their legal issues through practical business advice and cutting-edge legal insight. Our clients view us as trusted business advisors because we understand that great legal service is only valuable if it is relevant, practical and beneficial to their businesses.
In case you missed the webinar, see below for a recording, following are key takeaways from the discussion between Brendan Foo...
United States Corporate/Commercial Law
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In case you missed the webinar, see below for a recording, following are key takeaways from the discussion between Brendan Foo, an investigative due diligence expert with Forward Risk in Washington, D.C., and Louis Lehot, a partner in the transactions group at Foley & Lardner LLP in Silicon Valley, on the importance of investigative due diligence for buyers and investors in business.

What is Investigative Due Diligence?

Investigative due diligence goes beyond a simple google search or a basic consumer background check available online by engaging with an expert firm to dig deeper to understand the founders, executives, and other key players involved in a deal. It considers factors like:

  • Track record: How have they performed in previous ventures?
  • Legal history: Are there any red flags in their past?
  • Reputational risk: What is their online presence and industry reputation?
  • Motivations: What are their goals for the company?
  • Potential conflicts of interest: Are there any hidden agendas?

Benefits of Investigative Due Diligence

  • Maximize Upside: Uncover hidden opportunities.
  • Minimize Downside: Identify potential risks early on, such as a history of lawsuits or problematic business practices.
  • Negotiate Better Deal Terms: With a clear understanding of the people involved, you can negotiate more favorable terms.
  • Increase Confidence in Investment: Having a comprehensive picture of the people behind the company reduces uncertainty.

Who Should Use Investigative Due Diligence?

  • Investors of all sizes, especially those investing significant sums.
  • Founders seeking investment: Transparency about potential issues can strengthen your case.

How to Engage Investigative Due Diligence Services

  • Consider cost vs. deal size: Smaller deals may require a lighter touch investigation.
  • Work with a reputable firm with access to specialized databases and resources.
  • Engage the investigators through your lawyer to benefit from attorney-client privilege and attorney work-product doctrines.

Additional Points

  • Experience Breeds Insight: Investigators have seen a wide range of situations, from the seemingly ordinary to the truly bizarre. This experience allows them to anticipate potential issues and help you react calmly and decisively.
  • Context is Key: An investigative report might raise red flags, but an experienced lawyer can help interpret those flags in context. For instance, a criminal record in a specific industry might not be an automatic disqualifier, depending on the context. Brendan gave an example of an investor in the cannabis industry where a founder's criminal record for marijuana offenses was viewed favorably, because it showed he had experience with the product!
  • Beware of Unrealistic Promises: Not all information is obtainable legally or ethically. A skilled investigator will understand the legal boundaries and will work within them. They should also be transparent about what information they can and cannot uncover.
  • Collaboration is Key: The best investigative due diligence involves collaboration between you, your lawyer, and the investigative team. Having a lawyer who works frequently with a trusted investigator can ensure a smooth process and well-contextualized findings.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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