Due diligence

Close More Deals With a Master Due Diligence Questionnaire

Benefits of Closing Deals Using a Master Due Diligence Questionnaire

Capital raisers who want to approach wealth managers, multi-family offices or larger private investors and need a more organized due diligence process.

Worth quoting

What this talk covers

A master due diligence questionnaire, or DDQ, is one document that answers the questions investors ask most often. The speaker explains that multi-family offices and wealth managers may represent 20, 50 or 100 clients. The speaker says winning over one investment committee can sometimes mean raising 10 million to 50 million dollars at a time. The idea suits capital raisers who want checks of half a million dollars or more.

Each investor sends a different list. One wealth manager may ask 40 questions, another 28, and a multi-family office 70, with several that differ. The talk suggests answering the most thorough list once, then adding new questions over time. It also suggests pairing the DDQ with a third-party due diligence report and sending both printed with a cover letter. The speaker says both would cost less than 5,000 dollars.

From the source

• A multi-family office may represent 20, 50 or 100 clients, so one win can sometimes mean raising 10 million to 50 million dollars at a time, according to the speaker.
• Investor questionnaires vary, for example 40 questions from one wealth manager, 28 from another and 70 from a multi-family office.
• A family office club member who started with about 350 million under management now raises about 80 million dollars a year from RIAs and multi-family offices.

General education only. Not legal, tax or investment advice.

Talk to a securities attorney to explore options around due diligence disclosures, offering documents and investor communications. Do not use AI to write your own legal agreements.

What to take from this talk

1. Multi-family offices multiply your reach. A multi-family office may represent 20, 50 or 100 clients. Winning one chief investment officer or investment committee could lead to 10 or 30 investors in a deal.
2. Build one master questionnaire. Different investors ask for 40, 28 or 70 questions, and many of them differ. A master DDQ holds the most thorough answers so you do not start over each time.
3. Grow the document over time. When a new due diligence question comes up and the answer is worth sharing, add it. The speaker favors sharing more rather than less, so the DDQ becomes more complete. Many sponsors talk to a securities attorney about what belongs in it.
4. Add a third-party report. The speaker suggests sharing a due diligence report from an outside firm that investors can verify through the firm's website. It sits alongside the DDQ as proof of transparency.
5. Print it and mail it. A printed package with a short cover letter is more likely to be read than another long email. The speaker says most people will not make that effort, which sets you apart.

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

Put this into practice with the data room checklist. See all due diligence resources.