Who is calling the shots?

When considering a new opportunity it’s vital that your due diligence uncovers the true decision makers within the business so that you can ensure the opportunity is what you think it is.

Written by: Alex Cooper
5 minute read
Image: Who is calling the shots?

Who owns the business you work for? Who’s on the board? What are their backgrounds and their track records? How do they run businesses and how have they exited businesses previously? Who or what is the driving force behind decision making and do you know who they are?

Who is calling the shots?

When considering a new opportunity it’s vital that your due diligence uncovers the true decision makers within the business so that you can ensure the opportunity is what you think it is. A business’s ownership structure, funding situation, leadership team, board and exit strategy are key areas for you to understand in detail.

Who actually owns the business? A major shareholder, investor, silent (most of the time) partner, the board members themselves? Understanding where decision making or influence lies from an ownership and shareholding perspective will help you to understand the dynamic when it comes to the things that you care about.

Where does the money come from? Is the business funded by investors, Venture Capital, Private Equity, maybe it’s publicly listed and you can find out everything you need to, maybe it’s privately owned and you’ll need to dig deeper. Understanding the funding situation of the company and it’s cash burn rate will enable you to understand the pressures and priorities from a financial perspective and help you to steer your due diligence further. If all the money is coming from one single investor for example, then it’d be worth looking at their other investments and ideally getting to know them too. If the money dries up, what are the back up plans?

Who’s on the leadership team and who’s on the board, they aren’t necessarily the same. What are their track records, where have they worked previously, were they successful, is this their first time running a business? And so on and so on. You may be very bought into your new boss’s plans but without understanding the wider organisation and the key decision makers, you can’t be sure that those exciting plans are going to come to fruition. If the new owners have a history of asset stripping and selling business units, you may want to reconsider…

What’s the exit strategy or what are the goals for the business? If it’s driving up share price then how do they plan to do that and how might that affect your role or area of the business? If a business is looking to be acquired in the next 2 years then long term sales strategies probably aren’t going to be much of a priority. Maybe the business has been built to be acquired by a particular buyer, what is the state of that buyer’s business and what are the plans if that interest disappears?

Addressing these points and doing as much digging as possible throughout the course of your interview and due diligence processes can give you and idea of who is really calling the shots.

…or perhaps who isn’t!