Integrity Due Diligence for Private Equity Decisions
When the numbers look good, and the person matters more
Private investments have a particular kind of glamour. A founder sits across from you, intelligent and persuasive, offering you a seat near the engine of a promising new business. The projections look clean. The story is compelling. The upside feels obvious.
And yet, early private equity is where confident spreadsheets go to meet human nature.
In founder-led ventures, the numbers rarely carry the true risk. Character does. Incentives do. Governance does. The founder’s relationship with reality does. And the investor’s relationship with fear does too, especially when the next capital raise arrives and the easiest path is to send more money rather than tolerate the discomfort of saying no.
This service exists for that moment.
Not to “find the next unicorn.” Good luck with that. Not to play detective theatre. Simply to help you make a decision you can respect later, with your eyes open.
What this is
A private, confidential, integrity-focused diligence engagement for investors considering a private investment in a founder-led business, especially where the venture is early, messy, or thin on formal diligence materials.
It’s an independent second set of eyes, tuned to the parts that are hardest to quantify and easiest to rationalize.
What this is not
This is not legal advice. Not accounting advice. Not a promise that a venture will succeed or fail. Not a deal-sourcing service.
It’s a reality check and a decision framework, grounded in judgment, incentives, and integrity.
Why “integrity diligence” exists
In public markets, governance and disclosure are at least partly institutionalized. In early private ventures, governance can be a mood.
A founder can be brilliant and still be slippery with truth. A founder can be honest and still be chaotic. A founder can be principled and still be exhausted, reactive, and tempted by the easiest narrative in the room.
And investors, even sophisticated ones, can get pulled into subtle traps: confusing charisma with competence, treating confidence as control, and letting a compelling story substitute for sustained competitive growth.
The central idea
Projections are fragile. Character is consequential.
When there is limited history, the person becomes the business.
So the questions change. They become less about decimal places and more about truth habits.
Does this founder tell the whole truth, or only the useful truth?
Do they revise beliefs when reality changes, or do they double down?
How do they treat people who disagree with them?
How do they behave when they are cornered?
How do they speak about prior partners, employees, investors?
Do they protect trust, or spend it?
This service is designed to examine those questions without drama, and without naïveté.
The founder is not only a founder
Early ventures don’t run on spreadsheets. They run on a person’s life.
So part of integrity diligence is widening the lens. What else is going on in this person’s world while they are building the business?
Are their foundational relationships sound? Are they steady at home, or quietly in turmoil? Are they resourced by the people closest to them, or are they using the company as an escape hatch?
This matters, not because investors are entitled to somebody’s private life, but because early-stage companies are stress machines. If a founder is already living inside personal instability, stress doesn’t stay compartmentalized. It leaks into hiring, decisions, cash, and ethics.
And the way a founder responds when you begin to ask respectful personal questions is information. Not the content of what they disclose, but the manner: do they become evasive, defensive, performative, irritated, charming, suddenly vague? Do they welcome clean scrutiny, or do they treat curiosity as disloyalty?
I’ve seen this often with highly credentialed technical founders and inventor types, including P. Eng, P. Geo, and similar profiles. They can be brilliant builders and deeply conscientious. They can also be prone to workalism: doubling down on the company as a form of escape from something painful at home, or from an identity problem they don’t want to name. The risk isn’t “working hard.” The risk is using work as anesthesia.
We also look for relational enmeshments inside the young firm. Early teams often blur boundaries. Sometimes it’s innocent and temporary. Sometimes it becomes corrosive: favoritism, unclear reporting lines, emotional dependence, conflicts of interest, or personal relationships that quietly distort decisions. A messy cap table is one thing. A messy human system is another.
And we pay attention to governance theatre. Many early firms talk about an “Advisory Board.” The question is whether it actually advises.
Is there real challenge and oversight, or is the advisory board window dressing designed to borrow credibility? Do advisors meet, ask hard questions, and have influence? Or are their names simply sitting on a slide deck while the founder remains functionally unchecked?
None of this requires cynicism. It requires realism.
Professional friction as an early signal
One of the quietest early warnings in a young business is when internal professionals begin stepping away.
If a CPA, controller, finance lead, or legal counsel leaves early, that doesn’t automatically mean wrongdoing. People leave for ordinary reasons. But it can be a signal worth taking seriously, especially when the explanation is vague, defensive, or overly polished.
Professionals with designations carry obligations. They have standards they must maintain. When a founder starts riding roughshod over basic controls, truthful reporting, or reasonable governance, the professional either pushes back or disappears.
Sometimes they disappear because pushing back isn’t safe. Sometimes they disappear because they can’t sign their name to what they’re being asked to tolerate. Sometimes they disappear because the company is quietly becoming something they don’t want to be associated with.
Integrity diligence pays attention to those exits, and to what is said about them.
Messy failure and the hidden cost of drama
There is another part of early private investing that rarely appears in pitch decks: what failure can look like.
Sometimes the company fails quietly. Often it doesn’t.
Failure or a takeover can arrive with unpaid debt that gets called. Early family and friends may start seeking allies across the equity spectrum, and the cap table can turn emotional fast. Some parties may hold priority shares or preferential terms that change the payoff and change the tone of every conversation.
That is how drama starts: asymmetrical outcomes, confused expectations, and people trying to protect themselves after the fact.
It can become lawsuits, finger-pointing, and emotional pleas to “support the company” even when the economics have become lopsided, or when further funding simply protects earlier insiders.
If you are conflict-averse, publicity-averse, and have better things to do with your life than orbit a distressed cap table, the mere prospect of this alone may be a firm no.
Integrity diligence names this risk up front, because it is not only financial. It is relational, reputational, and time-consuming.
My own bias and why it exists
I’ve made two early private investments largely on integrity.
Neither worked out.
I don’t regret them, but I don’t romanticize them either. What I gained wasn’t a return. It was a direct education in the human forces that never appear in projections: how a founder behaves when reality tightens, how optimism turns into pressure, and how quickly “supporting the mission” can become “just one more cheque.”
I also learned something subtle: early private equity rarely stays a single decision. The initial investment is often the first chapter in a relationship, and sooner or later the follow-on ask arrives. Sometimes it’s rational. Sometimes it’s simply the path of least resistance. Sometimes it’s fear dressed up as loyalty.
In both deals, I said no to further funding and held my boundaries. That mattered. Not because it saved the investment, but because it protected my judgment.
The next time I do this, I’ll likely prefer lower commitments spread across more projects. Very early private equity behaves less like “fundamentals” and more like a lottery ticket: luck intersecting with integrity, timing intersecting with staying power.
And I’ve noticed something else. The world rewards seductive scale based on story more than it rewards the unglamorous grind of sustained competitive growth. That mismatch creates risk, and it also creates pressure, because the story can keep sounding good long after the numbers should have become more honest.
This service is built for that reality.
The opportunity cost question
Private equity is often sold as if public markets are the boring alternative.
They are boring. That’s part of the point.
Public markets have liquidity, price discovery, regulation, and at least some standardized disclosure. They also have a less romantic but important truth: the system rewards the status quo. Throughout history, only a handful of companies command a very large share of global market capitalization and have been the engine of long-term sustainable public equity returns.
So part of integrity diligence is asking the opportunity cost question plainly.
What is the return you need from this private investment to justify the risk of illiquidity, opacity, and governance fragility?
Is the illiquidity premium really worth it, especially when the true downside is not just “it fails,” but “something hidden and possibly fraudulent was happening while you were locked in”?
This is not paranoia. It is realism about incentives when capital is private and scrutiny is optional.
The follow-on funding problem
Many investors imagine a private investment as “invest and forget.”
In early ventures, the more common pattern is: invest, then get asked again.
Sometimes it’s rational. Sometimes it’s the founder trying to reduce their own discomfort by spreading it across the cap table. Sometimes it’s a soft test of loyalty. Sometimes it’s simply: “You were easiest to ask.”
The hard moment arrives when the founder says, implicitly or explicitly:
“If you don’t participate, we might not make it.”
That’s where fear enters. Fear of loss. Fear of regret. Fear of being seen as disloyal. Fear that saying no makes you responsible for the outcome. Fear of not being liked.
This service includes preparing for that moment before it happens. We talk about your maximum total commitment at the start, not when you’re stressed, already invested, and trying to avoid discomfort.
Suitability comes before diligence
I like starting with suitability, because it is where most people fool themselves.
In the private markets world, “sophisticated investor” can become a flattering label. It is often defined by wealth, which can be an ego boost. And ego, when it’s quietly pleased with itself, becomes persuadable.
Suitability goes beyond a regulatory tick box.
Suitability is personal and unromantic:
Do you actually have room for this risk?
Do you have the temperament for illiquidity and uncertainty?
Do you have the emotional bandwidth to watch a messy venture wobble without trying to rescue it?
Are you investing because you believe in the business, or because you enjoyed the feeling of being invited?
This is also where motives get named, because motives drive risk-taking.
I’ll ask you directly whether greed, pride, status, or some other hunger is driving your interest in complex assets. Not to insult you. To protect you. Complexity has a way of flattering people into thinking they are seeing something others can’t.
Sometimes the real driver is simpler: the desire to feel early, chosen, special, or unusually perceptive.
If that is present, it belongs on the table.
This is also where boundaries get named plainly.
Not the performative boundaries people claim to have.
The ones they can keep when a persuasive founder is disappointed, when the room gets quiet, and when “being liked” becomes the hidden price of saying yes.
A candid note about founders who have failed before
Many investors flinch when they discover a founder has founded other companies and those companies failed.
Sometimes that is a warning. Sometimes it is an education.
Early ventures fail often enough that prior failure, by itself, does not tell you what you need to know. The real question is whether the founder learned anything that shows up in present-day behavior.
Do they take responsibility, or rewrite history?
Do they speak about failure with clarity, or with blame?
Do they have scar tissue that improved judgment, or simply stories that protect pride?
It’s also worth noticing your own fear here.
Some investors avoid founders with prior failure because they don’t want to be associated with another one. That fear can push you toward founders who have never been tested, which is its own kind of risk.
A founder who has handled early failure well may be more realistic, more humble, more disciplined, and less seduced by their own story. In some cases, dealing with earlier failures is exactly what makes the next attempt viable.
Why you should not outsource the decision
Private equity can create a subtle dependency.
Once you show interest, you may find yourself surrounded by credentialed professionals: accountants, lawyers, CFAs, investment advisors. The credentials feel reassuring. The titles sound like authority. It’s easy to let that chorus replace your own judgment.
But most of these roles are designed to operate inside a narrow mandate. Their job is to document, to stay compliant, and to reduce liability. They can advise within that pigeonhole, and that can be valuable. What they cannot do is share your financial exposure. They don’t live with the same consequence if the deal goes to zero.
So yes, they can help with mechanics, paperwork, and compliance.
They cannot own the decision.
Private equity is a complex choice that you must fully own and be fully accountable for. That includes the possibility of a 100% loss of capital.
This service exists partly to bring you back to that adult truth, without drama. Not to frighten you. To keep you honest.
I help you ask the questions that matter so you can lead with feel instead of ego and fantasy. Not “feel” as in impulsiveness. Feel as in discernment: noticing what is off, noticing where you are being seduced, noticing where you are trying to buy belonging, status, or certainty.
When the deal is private, the most important risks are often private too.
Why the “numbers people” sometimes miss the point
There’s another character who often appears around early deals: the wannabe advisor with an MBA.
They’re trained to explore numbers. They can build a model, discuss margins, and speak fluently about gobbledygook jargon to appear wise. But many become visibly uncomfortable when the conversation turns personal, because it’s awkward and it’s not in the spreadsheet.
Yet in early private equity, that personal territory is often where the real risk lives.
Some of these advisors also have very little skin in the game. Not always, but often. They may never have put their own money at 100% risk in an illiquid venture. Some are still carrying student loan debt while advising you on “risk-taking.” They can be book smart and street naive, and that mismatch shows up as confidence about what is measurable and avoidance of what is human.
This is not an attack on MBAs. It’s a reminder that credentials don’t automatically create judgment. Early-stage investing is a craft. It requires comfort with discomfort: asking the personal questions politely, noticing evasiveness, naming incentives, and refusing to outsource responsibility to the model.
How I work
This is structured, but human.
Suitability, intent, and boundaries
We start with you, not the pitch deck.
What role is this investment meant to play in your life and portfolio?
What is the maximum you’re willing to lose, financially and emotionally?
What does “support” mean, and what does it not mean?
What would make you say no, even if the story stays exciting?
We name the quiet drivers too: pride, belonging, fear of missing out, rescue fantasies, fear of being disliked.
No shaming. Just clarity.
The narrative vs the evidence
We separate what is asserted from what is known.
What is measurable today?
What is assumed?
What would need to be true for the projections to be plausible?
What are the dependencies and single points of failure?
What is conveniently omitted?
Early ventures can still be attractive. They just benefit from being described honestly.
Founder integrity pressure-testing
If appropriate, I can help you prepare questions for the founder, or join a meeting as a silent observer or active participant, depending on what you prefer.
This isn’t an interrogation. It’s a stress test of reality contact:
clarity under scrutiny
consistency across explanations
specificity vs performance
how uncertainty is handled
how responsibility is described when things go wrong
how prior failures are owned, integrated, and translated into better practice
how the founder handles respectful personal questions and boundary probing
what the advisory board actually does, not what it is called
signals of professional discomfort inside the firm, including who leaves and why
how the cap table behaves under stress
Diligence that fits a messy venture
When the company is early, “standard diligence” can become theatre. We aim for a lighter but sharper form of triangulation:
reference calls and pattern checks
customer truth, not customer enthusiasm
incentives, control, and governance realities
the real funding plan, not the hopeful one
where future capital pressure is most likely to land, and how it will be framed
team dynamics and potential enmeshments that distort decisions
whether internal controls exist in practice, not just in documents
what failure could look like in practice, including debt, priorities, and conflict
The aim isn’t perfection. The aim is fewer illusions.
A decision memo you can stand behind
You leave with a plain-language memo that captures:
the thesis in one paragraph
the risks that actually drive outcomes
what evidence is strong vs weak
terms that protect you and terms that don’t
your boundary on follow-on asks
a clean “yes,” “no,” or “not yet,” with reasons you can live with
It’s the opposite of vibes. It’s the opposite of performative caution. It’s a decision you can explain to your future self.
What you leave with
A clearer read on founder integrity and reality contact
A shortlist of the risks that truly drive outcomes
A practical plan for follow-on funding pressure
Language you can use when you decline additional capital without apologizing
A way to invest without becoming emotionally leveraged
A decision you can own without needing a professional chorus to bless it
A candid note on failure rates and what “good judgment” looks like
Most new ventures fail. That’s not cynicism. It’s the base rate.
So the aim here isn’t pretending we can reliably “spot winners.” The aim is more useful:
Reducing the odds of losing money for avoidable human reasons
Structuring commitments so one deal doesn’t corner you into follow-on pressure
Keeping your integrity intact when the founder is persuasive and the room gets emotional
That’s a realistic ambition. And it’s surprisingly rare.
Format
Private. Confidential. No group dynamics. No public testimonials. No performance.
This can be a one-time diligence engagement for a specific deal, or an ongoing advisory relationship if you are regularly exposed to private opportunities.
Important boundaries
This service is educational and advisory in nature. You remain responsible for all investment decisions. I’m not acting as your legal counsel or accountant, and I’m not promising outcomes.