10 Small Details That Matter in Due Diligence
10 Small Details That Are a Big Deal in Due Diligence
Sponsors who pitch at investor events and investors who want to screen deals faster and waste less time.
The 5 big lessons
- Carry a physical business card. The speaker asks for a card with a matte back that can be written on. A QR code gets lost in the speaker's electronic files. Printing cards costs about 40 bucks on VistaPrint.
- Win the lunch line in 15 seconds. There is no time for a 60 second or 30 second pitch. The listener wants the asset class, whether it is income, growth or both, and the minimum check size.
- Accept a no quickly. Cutting a mismatched talk after 2 minutes instead of 5 lets sponsors and investors meet far more people. It leaves more time for the person who likes the idea.
- Send the deck to AI screening. The speaker's group runs decks through the Deal Screener, an AI tool from Richard C. Wilson. A score of 70 or higher gets a look, and a score of 40 is never seen. Because AI reads the content, the length and look of the deck matter less.
- Show how you handled 2022. Pre-2022 IRR track records carry limited weight, especially in apartment syndications. The speaker wants to know how the sponsor responded after rates rose from March 2022 to July 2023.
What you will hear
The speaker is 72 and belongs to a group of more than 50 accredited investors who share deal flow and run joint due diligence, then invest separately. The typical check is $100,000. In a lunch line at a Family Office Club event, the speaker has about 15 seconds and wants three facts: the asset class, whether the deal is income or growth, and the minimum check size.
Other details follow. A physical business card with a matte back works better than a QR code. Pitch decks go through an AI Deal Screener, so design matters less. Deal flow grew from four private placement offers a year to 400, yet the speaker invests in only four to six. Criteria change over time, and pre-2022 returns say little on their own.
Key facts
- The investor group has more than 50 accredited investors and a typical check size of about $100,000, according to the speaker.
- Decks that the AI Deal Screener scores at 70 or higher get a look, while a score of 40 is never seen.
- Private placement offers grew from four per year before 2021 to 400 last year, with four to six investments per year.
Sources
From Richard C. Wilson's Centimillionaire Strategies YouTube channel: 10 Small Details That Are a Big Deal in Due Diligence. Quotes come from the video captions, lightly edited for readability. Figures are the speakers' own estimates and experience.
General education only. Not legal, tax or investment advice.
Talk to a securities attorney to explore options around private placement offerings, investor eligibility rules and offering documents. Do not use AI to write your own legal agreements.
Said on the call
"Take no for an answer quickly because you're going to double or triple the number of people you're going to meet."
"Different investors have different criteria, and they change with time."
"I want your pitch deck and I want it now. I want it immediately because we're going to be throwing it through one of Richard C. Wilson's AI tools called the Deal Screener."
- 1Hand over a physical business card
- 2State the asset class
- 3Say income, growth or both
- 4Give the minimum check size
- 5Accept a no quickly
Related questions
- How do I close a funding round?I close a funding round by focusing on investors who fit the opportunity and moving each interested prospect through clear, consistent follow-up.
- What documents do investors request during due diligence?Prepare a clear, organized package covering your operations, investments, compensation, team, and track record.
- How do I raise capital for my business?I raise capital by building a repeatable system for attracting the right investors, establishing credibility, and developing relationships before asking for money.
Questions about this video
What does this investor want to hear in the first 15 seconds?
The asset class, whether the deal is income, growth or a mix, and the minimum check size. These facts decide whether the conversation continues.
Does the look of a pitch deck still matter?
Less than before, according to the speaker. The group sends decks through an AI Deal Screener that extracts the information, so the length of a deck matters less to this group.
How many deals does this investor see and fund?
Before joining Family Office Club in 2021, the speaker got four private placement offers a year. Last year it was 400, and the speaker invests in four to six per year.
Put this into practice with the pitch deck grader. See all due diligence resources.
