This week I received my new copy of “The Deal” magazine, which focuses on all activities that are M&A related. One article that was a pretty enjoyable, not too mention dramatic read, was about the path that a Las Vegas-based company, Xyience, has taken in its path to raise capital and achieve sales goals. The name of the article, “Rumble”, followed the various paths of investor fraud and malfeasance that had occurred over the years. It also detailed the history of it’s main executive, Russell Craig Pike. The article documented the various entities that Pike had been involved with and his history of criminal fraud. The biggest question the article left me with was how on earth did this individual continue to raise investor funds and how none of the investors, atleast it appears, did any type of due diligence on the company and the executive team.

The simple concept of due diligence shouldn’t just stop at the financials, but should extend to all aspects of securing resources for your organization. One of the areas that I put in every effort to ensure integrity is in my personal network. Everyone manages their network differently, but I put a significant effort into my LinkedIn profile and the contacts that I keep. There is no one person that I add to my network that I haven’t met with directly or that shares multiple points of contact directly within my network. I also want to make sure that I follow the work of my contacts and the levels of service they provide if I make a recommendation. And these efforts are just for service referrals. When it comes to funding activities, I would advocate nothing less than a complete background and reference check. Know who you are doing business with, their history of success, and their reputation.

Looking at investing in a business, purchasing a business outright, or entering into a strategic partnership? You should know exactly who you’re going to be risking your reputation and funding on. After all, due diligence doesn’t stop at the financials . . . .
Thanks for reading. . . .

Jeffrey Ishmael