Episode Summary

In this episode of Capital Conversations, Erik Nelson introduces the core principles of due diligence and explains how professional investors evaluate investment opportunities before committing capital.

Using FINRA Regulatory Notice 10-22 as a guide, Erik discusses management evaluations, background investigations, financial statement analysis, market research, competitive analysis, and common warning signs that investors should never ignore. He also explains why due diligence is designed to reduce risk, improve decision-making, and protect investor capital throughout the investment process.