DWP Investing Principles: Don't Ignore Negative Founder Behavior During Diligence

I have decided to take a page out of Ray Dalio's book Principles. I am actually taking the whole book. I have started documenting my investment and management decisions to see if my assumptions are correct over time. I am also going back to the previous conclusions that I have made that have resulted in success or failure to codify my principles. Take a look at principle 1.0 on Relationship Deals here.

2.0 Don't Ignore Negative Founder Behavior During Diligence

Do not ignore founder behavior that is undesirable during the discovery and diligence process. Often it is easy to try to intellectually “throw dirt” on these issues because you are already biased in doing the deal. This is a classic example of “hearing only what you want.”

When you close the deal, these founder traits do not disappear, and they worsen. Founders are on their best behavior in the beginning stages - do not convince yourself that it is an oversight. These traits are alive and well. They will be let out after the money is wired.