Before you go to a restaurant, you look at the menu. Ahead of a holiday, you browse a guidebook – or at least a few blog posts. In the same way, you should always do a careful assessment – so-called due diligence – before making an investment in an unlisted share. It is a way to reduce uncertainty and make more well-founded decisions, especially in a market where information is often limited.
Investment-based due diligence is the process where an investor analyses and evaluates a potential purchase. The aim is to understand the deal's risks, opportunities and relevance in light of one's own strategy. It is about both verifying facts and building an overall perspective on the investment opportunity – not just on the company itself, but also on the market and the context surrounding the deal.
Here we take a closer look at how this important process is applied within the secondary market for shares in private companies.
What is due diligence?
Due diligence is the foundation of a sustainable investment strategy for unlisted shares. Whether it concerns listed securities on the exchange or stakes in private companies via platforms such as Accumeo, it is wise to first build an overall picture of the investment. It is not uncommon for companies in the private segment to lack a clear public information structure, which makes the investor's own work even more crucial.
This means evaluating the company's market value and volatility, as well as gathering data on revenue, profit margins, growth and debt. This type of figures and analysis is often called hard due diligence, and it serves as the foundation of a quantitative assessment.
But there is also a softer side. Soft due diligence focuses on harder-to-measure factors, such as company culture, leadership, competence within the board and management, and ESG risks (environmental, social and governance factors). In private companies, where dependence on individuals is often greater than in listed companies, these aspects become particularly important.
Due diligence on the secondary market
On the private side, a lack of information and complex structures can complicate the due diligence process. But digital platforms such as Accumeo increase transparency in a previously hard-to-read market, especially for private individuals.
Unlisted shares have long been characterised by poor liquidity and unclear processes. Accumeo changes this by gathering all relevant data – from shareholders and key figures to buy and sell interest – in one place. The platform also offers digital processes, standardised documents and open pricing, which creates a fairer and more predictable market for all parties.
Why is it important?
Due diligence is crucial for a well-founded investment decision. A broad analysis gives the investor better conditions to build a balanced portfolio, assess risk levels and identify any warning signs at an early stage.
Even though the process is sometimes complex and time-consuming, it is a central part of the investment process. Particularly in the private market, where misjudgements can be costly and exit opportunities are fewer, it is extra important to do your homework.
Properly conducted due diligence lays the foundation for a long-term successful investment strategy.
How do I get started?
Creating an account with us is free and quick – the process takes about three minutes. Before you can start investing, you need to answer a few questions to ensure that we comply with applicable regulations and that you are aware of the risks of investing in shares.
Via Accumeo's platform you can explore private companies, follow market developments and add watchlists. Whether you are an experienced investor or new to the field, the platform helps you navigate an exciting and often underrated part of the stock market. By gathering and presenting relevant information clearly and accessibly for the first time, we make it easier for you to find investment opportunities, evaluate potential investments, buy and sell unlisted shares and follow your portfolio's development.
Through our platform you can smoothly buy and sell unlisted shares. Whether you want to invest in new private companies, increase your current holdings or realise value in your portfolio, we offer a transparent process with standardised agreements and terms.
