Before you sign that partnership: a practical due diligence checklist

The offer looks excellent. A distributor promises nationwide reach. An investor wants to come in fast. A supplier offers terms nobody else will match. There is just one condition: you need to decide this week.

Urgency is the oldest trick in business, and it works because it stops people from checking. Most bad partnerships are not the result of fraud. They come from assumptions nobody tested, promises nobody wrote down and responsibilities nobody agreed. Due diligence is simply the habit of checking before you commit.

The real problem: trust without verification

In close-knit business communities, deals often move on reputation and relationships. That is a strength, until it becomes a blind spot. A referral from a friend is a reason to start a conversation, not a reason to skip the homework.

The typical costs of skipping it:

• Paying for a service or stock that never arrives in full
• Discovering the partner does not actually have the licence, capacity or reach they claimed
• Signing terms that tie you in long after the relationship has stopped working
• Sharing customer data or intellectual property with no protection
• Finding out about debts, disputes or other partners only after you are involved

Step 1: confirm who you are dealing with

Start with the basics. They take little time and they catch a lot.

• Confirm the company is registered, and that the name, registration number and address match what you were given
• Check who the directors and decision-makers are, and that the person you are talking to can actually sign
• Look for a real address, working phone numbers and a consistent public presence
• Search for public complaints, disputes or news coverage

Step 2: test the claims

Every pitch contains claims. Your job is to find out which ones are true.

• Ask for evidence of past work you can verify yourself: live products, real locations, contactable references
• Where they claim capacity, ask how: staff, equipment, suppliers, licences
• Where they claim reach, ask for proof that is specific and dated, not a screenshot without context
• Where numbers are quoted, ask where they come from and what period they cover

Numbers without a source or time period are a warning sign, not a reason to be impressed.

Step 3: understand the deal itself

• Write down in plain language what each side gives, gets and is responsible for
• Agree what success looks like, how it is measured, and what happens if it is not reached
• Understand how either side can exit, and what happens to money, data, stock and IP when they do
• Link payments to milestones or deliveries where possible
• Get legal advice on the final contract, especially for investment or long-term agreements

Step 4: stress-test the downside

Ask the uncomfortable questions while everyone is still friendly. What happens if the partner misses a delivery? If the key person leaves? If the market changes? If one side wants out? A partner who welcomes those questions is usually a partner worth working with.

For investors: the same rules apply

Angel investors face the same risks with higher stakes. The most useful signals tend to be practical: real revenue, however small, a team that operates the business and not just the pitch, an understanding of local realities like payments, connectivity and power, and a clear view of what has to be true before the next stage of funding.

Keep a written record

Due diligence is only useful if it is remembered. Keep a short file for every significant partner: what you checked, what you found, what was promised and what was agreed. It protects you if a dispute arises, helps new team members understand the relationship, and makes the next decision faster. It also sends a quiet signal to the other side that you take commitments seriously, which tends to bring out the same seriousness in them.

Due diligence as a service

Business consulting and strategy at Seven Hundred Percent covers business support and growth strategies, management and administration consulting, investment advisory and partnership facilitation, and due diligence and partner vetting as a dedicated service. It is built for founders, executives and investors who need clear analysis and practical next steps.

We work in four steps. We Listen, to understand your position, constraints and goals. We Analyse: we research, verify and stress-test the options. We Advise, with a clear written recommendation and actions you can take. And we Support you through execution where you want us involved.

A consulting engagement has a defined question, a fixed scope and a written deliverable. For ongoing needs, an advisory retainer gives you scheduled access to the team. Where there is a genuine fit, we can also facilitate introductions across our network, after doing the same checks we would recommend to you.

If you are about to sign something important, do not let a deadline make the decision for you. Book a consultation, and we will help you check before you commit.