I am wondering if it is common for potential investors to ask for your personal financial info (bank statements, investment account balances, tax returns, etc.) as part of their normal due diligence before investing in a new searcher.
I have seen comments that they do "financial" background checks, but I'm not sure if that just means checking your credit score and making sure you don't have any liens or bankruptcies, or if they want you to open the full kimono and show proof of your net assets.
I know SBA lenders ask to see your personal financial docs because they require personal guarantees, but I don't plan on using SBA due to loan size restrictions.
Nobody has asked me for this info, and I kinda doubt they will, but figured I should be prepared if they do..
Do investors ask to see the personal financials of searchers?
by a searcher
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I highly doubt fund investors would ask for that, unless something wasn't adding up. More likely they just want a general sense that searcher is financially comfortable enough to take on multi-year risk without major distraction.
I did recently have a broker ask me for all my financial figures to determine my ability to fund the purchase of a company he was representing. Once we determined that I didn't have a couple million dollars in the bank, he refused to send me the offer docs. When I informed him that I intended to employ a daring new strategy that involved raising funds from investors (he seemed genuinely surprised), he insisted on seeing all their financials as well.
To make the story even better, he's an old family friend. Was actually my baseball coach back in grade school! Needless to say, I broke off communication, as that's not someone I can work with.