Due Diligence
Due diligence is a process within the investment analysis conducted by investment funds and investors in general, aimed at identifying risks and designing or establishing strategies to mitigate them after an investment.
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What is Due Diligence?
Due diligence is a process within the investment analysis conducted by investment funds and investors in general, aimed at identifying risks and designing or establishing strategies to mitigate them after an investment. During this process, the investor may uncover risks they are unwilling to take on, which therefore become “red flags” or issues that may lead to an investment being canceled. It is also possible that the investor may be willing to take on these risks, and the due diligence process will help them figure out how to mitigate them.
In the due diligence process the company's legal, corporate, regulatory, financial, accounting, and tax aspects are reviewed.
