84 - A Great Deal with the Wrong People is Still a Bad Deal
Even the best investment can fail with the wrong partners. Corruption, inexperience, or misaligned goals can sink a deal. Learn why partner due diligence is essential in emerging markets and how top investors assess track records, ethics, and governance.
A Great Deal with the Wrong People is Still a Bad Deal
When investing in emerging markets, the right opportunity isn’t enough—you also need the right partners. No matter how promising a deal looks on paper, corrupt, inexperienced, or misaligned stakeholders can destroy value and create unnecessary risks.
Why Partner Risk is a Major Concern
Unlike developed markets, where legal frameworks and regulations provide a level of security, emerging markets often rely heavily on trust and relationships. That’s why choosing the right partners is crucial.
Common risks include:
• Corruption and unethical practices – If partners cut corners or engage in fraud, your investment could be compromised.
• Lack of experience – Some partners may lack the skills to execute the business plan effectively.
• Misaligned interests – Differing long-term goals can create friction and lead to conflicts.
How Smart Investors Mitigate Partner Risk
Before committing to any investment, top investors conduct deep due diligence on their partners, including:
• Extensive background checks – Reviewing track records, references, and previous business dealings.
• Ethics and governance assessment – Ensuring alignment on values and responsible business practices.
• Clear contractual safeguards – Structuring deals to protect against mismanagement and bad actors.
Final Thought
A strong deal on paper can still fail if you’re working with the wrong people. The key to success in emerging markets isn’t just what you invest in—it’s who you invest with.
Listen to this episode of Pattern Cognition to learn how to spot red flags before it’s too late.
Highlights:
00:00 Introduction to Due Diligence in Emerging Markets
00:07 Understanding Partner Risk
00:11 Importance of Partner Alignment
00:25 Deep Referencing in Due Diligence
00:35 Conclusion: The Right People Matter
Links:
Website: https://www.sidmofya.com/
LinkedIn: https://www.linkedin.com/in/sidmofya/
Transcript:
Five key due diligence checks for investing in emerging markets. Number four, and this is a big one. Partner risk. Are you backing the right people in emerging markets? Who you invest with is just as important as what you invest in. Partners that are corrupt or inexperienced or misaligned stakeholders can easily sink a deal.
Due diligence means deep referencing. Assessing track records, ensuring alignment on ethics, governance, and long-term goals. A great deal with the wrong people is still a bad deal.