Permanent Podcast: Real Talk About Private Equity and Buying, Selling, and Operating Small Businesses

We've Open-Sourced Our Diligence Process (Do Diligence Confidently Ep. 1)

Sep 14, 2023
Guest
Tim Hanson and David Cover
Tim Hanson and David Cover of Permanent Equity explain why they have open-sourced their diligence process, aiming to demystify diligence in the investment industry. They emphasize the importance of understanding due diligence and being a fair partner in the process. The goal is to educate others about investing and foster healthy ecosystems for small businesses.
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ANECDOTE

Early Diligence Experience

  • David Cover initially didn't understand due diligence and relied on Google for its meaning.
  • His lawyer, unfamiliar with the specific deal type, also claimed knowledge, highlighting a situation of the blind leading the blind.
ADVICE

Open-Source Diligence

  • Permanent Equity open-sourced their diligence process for transparency and to build trust.
  • This helps potential sellers understand their approach and possibly choose them as a preferred buyer.
INSIGHT

Demystifying Diligence

  • The investment profession often overcomplicates diligence, creating distrust in the financial system.
  • Openness and fairness in diligence can lead to better outcomes and trust.
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