Saying “No” To Deals Avoids Blowups

Saying “No” To Deals Avoids Blowups

Tiger Global paid Bain & Co. $100 million to perform due diligence, yet Bain somehow missed that FTX was a fraud. Helpful hint: check the bank statement next time. Then, work your way backwards through the cash flow chain.

I can understanding hiring industry experts or functional specialists to assist with your internal investment due diligence process. However, for Tiger Global to have spent $100 million per year for Bain & Co. to assist with due diligence and for Bain to have missed the FTX fraud is unforgivable. My sense is that Tiger wanted to do the FTX deal and Bain was afraid to tell Tiger that it was a bad idea. Sometimes as a trusted advisor you have to tell your client what they don’t want to hear, even if it means you risk losing your client.

Bloomberg article HERE