∞Direct answer
Direct answer
Start with fit. Then check the firm, team, owners, terms, and main risks. Write what you know and what you do not. Set a stop point. This is a check list, not a plan for how much to invest. [1] [2] [3]
Start with mandate and scope
Review only deals that fit the family office mandate. A mandate is a written rule for where and how the office may invest. Check stage, field, place, cheque size, control, and time. If one rule fails, stop.
Write who can decide and who must sign off. UBS says 74% of family offices in its survey had an investment group. The group reviews and decides. [1]
- Mandate fit and any hard stop.
- Decision owner and conflicts check.
- Documents needed for the next step.
Test the company evidence
Ask for a small data room. This is a safe set of firm files. Check the product, customer proof, cash plan, and cap table. A cap table shows who owns shares. Link each claim to a file or source.
Keep facts apart from views. Mark data that is missing, old, or hard to read. Do not fill gaps with a story or a model. British Business Bank lists desk work, meetings, and market checks as parts of due diligence. [3]
- Product use and customer evidence.
- Cash, debts, and planned spending.
- Ownership, rights, and past funding.
- Open questions with an owner and date.
Review team, terms, and risks
Check team jobs, skills, time, and key hires. Call refs when the risk calls for it. Check who can act and how founders and backers work as a team.
Read the deal terms with a lawyer. Terms set rights, price, fees, votes, and dilution. Dilution means a smaller share after new shares are made. Ask about conflicts, reports, and investor rights. ILPA’s DDQ gives a common set of checks and a base for later checks. [2]
- Team roles, gaps, and references.
- Price, rights, fees, and dilution.
- Legal, regulatory, and data risks.
- Risks that need advice, not guesses.
Make a bounded decision and follow up
Write a one-page review. State fit, proof, open risks, and the next check. Pick review, pause, or stop. Do not turn a gap into a score or a return claim. A clear limit helps the office and the founders.
Set the next check before any deal. Ask for reports, big changes, and a review date. British Business Bank treats due diligence as an ongoing task, not a one-time task. [3] This process is for early-stage mandates only. It does not set portfolio mix.
- Decision: review, pause, or stop.
- Named owner for each open item.
- Reporting cadence and change triggers.
- Legal and tax advice where needed.
FAQ
Frequently asked questions
What should a family office check first?
Check the mandate first. If stage, field, place, or cheque limit does not fit, stop before deep checks.
How much proof is enough?
Enough to test each key claim and show key risks. Note what is missing. A model or note of interest is not proof. [2]
Does this process say how much to invest?
No. It tests fit and proof. It does not give a plan for how much to invest or a return view.
Should checks end after a decision?
No. Set report and review dates before any deal. Later checks can catch big changes. [3]
REF
Sources
- 1
- 2
Institutional Limited Partners Association (ILPA)
Due Diligence Questionnaire ↗ - 3
British Business Bank
Due diligence ↗