Hedging Your Bets: Strategy & sources for online due diligence

Marcy PhelpsPhelps Research, Inc.mphelps@phelpsresearch.comWeb Search UniversitySeptember 30, 2014 – Arlington, VA

Presentation slides:

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Twitter: @marcyphelps

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Due diligence – What?

The care a reasonable person should take before entering into an agreement or a transaction with another party

An investigation of a business or person prior to entering into an agreement

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When?

M & APartnershipsInvestments

Vendor/supply alliancesGrants

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Types of due diligence

Background investigationsLegalFinancialOperationsIPMarket/competition

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Background investigations

The past will help predict future actions360-degree view

Create a profile of professional/private livesGood and bad

Know what’s legal/ethical

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Online resources

Privacy

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Goals

Confirm all provided informationUncover any missing informationReconcile any inconsistenciesIdentify red or yellow flagsAnalyze and report

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ONLINE DUE DILIGENCEPublic recordsOpen webSocial mediaFee-based sources

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Where to start?

Does your subject know they’re being investigated?US? Non-US?Get basic info:

LocationIdentifiersSupplied bio

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StrategyBackground infoAffiliationsRegulatory/professional licensingLegalMedia

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Background info

LocationsName variationsSpouse/partnerFound biosVerify education

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Sources – Background info

Google/BingName with school(s), current companyName and “reports to”

Intelius.com/Veromi.comLinkedInDegreeVerify.com (need DOB)KnowX.comLexisNexis/TLO.com/Tracersinfo.comCredit reports – SkyMinder.com

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Affiliations

CompaniesNon-profitsOther distractions?

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Sources – Affiliations

Secretary of State websitesD & BLexisNexis public recordsGuidestar.com Premium

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Regulatory/professional licensing

State licensesRegulatory agenciesProfessional associations

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Sources – Regulatory/Licensing

FINRA, NFA, SECWikipedia: List of financial regulatory authorities by country http://bit.ly/1ooJ8QT BRBpubs.com – State licensingAMA, ABA, other national licensing boards

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Legal

State civil & criminalFederal civil, criminal, bankruptcyJudgments/LiensUCC filingsSex offender registries

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Sources – Legal

State courts – BRBpubs.comFederal courts – Pacer.uscourts.govSecretary of State websitesBRBpubs.comLexisNexis public records

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Media

NewsCurrentOldLocalMultimedia

Social mediaAlerts

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Sources – Media

Google/BingABYZNewsLinks.comIndustry publicationsNexis, Factiva, Proquest DialogFacebook, LinkedIn, Google +, TwitterSpokeo.comZoominfo.com

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CAN YOU SPOT THE RED FLAGS?

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Red flags

BankruptcyMultiple liens

FraudCriminal actionsMore than 1 SSN

Regulatory disciplinary actions

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Yellow flags

Supplied info not matching realityLack of experience/job-hopping

LitigationLack of people skills

Past business failures

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Best practices

Communicate with and listen to clientKnow your and your sources’ limitationsManage client expectationsDocument, document, documentForget the 80/20 rule!

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Analysis and reporting

SummarizeConnect the dotsPossible implicationsNext actions?

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Thank you!

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