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"There aren't too many reasons for one private company to do due diligence on another private company besides acquiring it" That is an often repeated but mista
by marcus 17y ago
"There aren't too many reasons for one private company to do due diligence on another private company besides acquiring it"
That is an often repeated but mistaken myth.
There aren't many reasons for a company to agree going through a due-diligence except for the chance to being bought, unfortunately some companies use due-diligence as a research tool into markets they think they might be interested in with no real intention of actually purchasing the inspected company, sometimes even developing a competing product at the SAME time.
- loganfrederick 17y agoTrue, that's why I worded it as "aren't too many reasons". Perhaps I'm naive, but I'd like to think that this isn't more than (made up percentage ahead) 10% of private company due diligence investigations. Although where you are more likely correct, and what I didn't think through well enough before my initial comment, is that in the case of Facebook/Loopt, it is possible that Facebook is building a Loopt competitor, rather than buying Loopt. ALTHOUGH, you would think Loopt would know this and wouldn't open itself to Facebook's scrutiny. Perhaps Facebook is making the case to Loopt that they're interested in purchasing them, but actually have much more sinister ideas? Ah, the politics of M&A. I love it.