Why investors should focus on digital due diligence

When investors are looking at companies to invest their money in, they always carry out due diligence before any formal agreement is completed and any final documents are signed. But what many aren’t focusing on is digital due diligence. And that’s a real mistake.

What is digital due diligence?

Digital due diligence focuses on conducting a comprehensive analysis of the digital assets of a company. It involves evaluating its digital footprint, IT infrastructure, compliance and privacy policies as well as disaster recovery (DR) and business continuity plans.

With so much business now conducted either partially or wholly in the digital sphere, neglecting digital due diligence can be a costly mistake for any investor in 2022.

What should digital due diligence cover?

Digital due diligence should show you exactly where your money will be spent and how it will be used, before you part with a penny.

Firstly, a complete digital audit needs to be completed that reports on the company’s digital capabilities. This is to ensure that they haven’t purposefully or mistakenly inflated their digital capacity.

The digital audit should include:

• Thorough site analysis
• Digital strategy
• Social media presence
• Content strategy
• Website design
• Web development platform
• PPC
• SEO

Secondly, the digital due diligence should analyse the brand’s growth projections and determine whether their promises are achievable. This is done by reviewing the conclusions of the digital audit and highlighting the changes that need to be made to reach desired goals as well as recognising what’s currently working well.

Once this has been done it can be determined how likely your investment is to grow.

Data driven recommendations

Any recommendations within digital due diligence should be driven by data and the most cost-effective solutions should be highlighted to help the business reach its investment potential. This is beneficial to both the company and the investors.

It could be that there are skills gap within the business that need to be plugged by hiring new team members. Existing staff may need extra training to get them where they need to be. Or alternatively, it may be recommended that the company employ an external digital agency.

Any proposed changes need to consider the company’s existing in-house infrastructure and what’s currently feasible with their set up.

Looking for a digital due diligence partner?

Forever is an experienced digital marketing agency and digital strategy consultants with a team of dynamic individuals who are experts in their fields. Our in-house team of specialists cover each sector within the digital marketing landscape including content marketing and social media teams, PPC experts, web developers and designers, and Google qualified digital marketing managers. If you’re an investor looking to get a true idea of where your money is going to go and whether you’re likely to see the returns promised, we can carry out digital due diligence on your behalf. Contact the team to get started.