Alternative Investment Due Diligence Questionnaire

P2P lending, litigation financing, or fractional real estate investments are just some of the alternative investment options that you can dip your toes to. However, they are not risk-free. As with any investment route, there are scams disguised as legitimate sources. Too often, alluring interest rates and convenient forms of investing snatch our attention. While some may work for our benefit, it’s no excuse to be complacent and forget about taking due diligence (i.e. voluntary evaluating an asset or platform) in knowing where our money will go, that’s why we have prepared an alternative investment due diligence questionnaire

After all, why would you want your hard-earned cash to go all down the drain? Being vigilant is leverage in investing. With this due diligence checklist, here are some of the things you can look into when spotting scams in alternative investing or any investment at all.

Affiliate disclaimer: Some of the links below may be affiliate links (disclosure). If you use these links to buy something we may earn a commission (which come at no additional cost to you). Thanks.

The Company

Perhaps the first part that you need to delve into is the company details of any platform, as this defines what the organization is all about. If you’re putting your money into other people’s hands, you should know a few things about the organization, such as:

  • Location: Are they virtual, or do they have a physical office?
  • Years in Operation: How long have they been operating? How many clients or transactions have they served throughout those years they were in operation?
  • Balance Sheet: Are they able to keep their expenses well up to their profit? Are they earning? Is there a business growing?


You may argue that the location wouldn’t matter as much in this digital age, but having a physical office will tell a lot about a company’s legitimacy. First of all, you’d want to know if they have a registered business address. This means that they are recognized by the country where they are headquartered.

It’s essential that they are visible and are not hiding under the authorities. Aside from that, you know that they are bound by the law to practice in the legal way. You can go through a country government website or exchange commission to check, but simple navigation in google will lead you to the right places.

You’d also want to know if they have an office space. Having a physical office tells you that a company has the financial capacity to afford to invest in space. It also means that they can’t vanish into thin air the next day when something goes awry. Once way of checking this is by doing a quick google maps search for the premises. If it shows up as a dirt heap in the middle of the desert, or more realistically, a random apartment in the city, then you should be on high alert.

You can also do a check for their address and see if there are any other businesses listed there.

Second, you’d want to check their location. So, should you need to have an in-person query, you’d know where to go. If they are within your reach, it puts your mind at ease knowing that you can always knock on their doors when something goes wrong.

You can also check if it has tangled up with issues on fraud or tax. Stumbling into these may already signal a substantial red flag and a warning for you to step away.

The Team

The backbone of any company is its people, and it’s the same for any organization. So, it’s best to know who the people running the company are. You may also research who its founder is and what the motivation led that person or that group to create the platform. Aside from that, you can also look at who comprises the decision-making body. The second is on their expertise, including the years of experience in each. If possible, delve deeper into their LinkedIn profiles to have further insight.


A company’s website reflects its character as an organization and as a trusted partner in the industry. If you find yourself going through the web pages feeling lost because of the templated designs and unclear directions, you might be in the wrong hands. A reputable company will and can invest in a good functioning website. More than that, they employ a dedicated team behind their platform to make your experience seamless and satisfactory. Of course, you can’t judge everything by their website, but the first impression counts, right?


When it comes to your money, knowing how it’s going to be secured matters. P2P platforms often employ marketing tactics to lure you into guaranteed and sometimes overstated high returns. Most investors are blinded by these high returns, that they omit the presence of corresponding high risks. For borrowers, the promise of a better lifestyle and making their dreams come true with loans are often some of the marketing lines used by platforms offering loans.

Think about this for a minute if a P2P platform promises you a definite return without stating how your money will be protected. That might be a red flag. Chances are, these platforms are not concerned about your money’s security but by how much you can invest out of your pocket.

Additional help with avoiding scams

Aside from looking at these factors manually, you can also use the platforms available such as Sneaky Peer. Intending to bring transparency to the peer-to-peer market, Sneaky Peer helps investors get on with their investments by practicing due diligence and decisions based on mathematical research. The platform employs a scoring system based on a due diligence checklist and together with the company’s historical performance. To help you as an investor decide on which investment you should put your money into, they have already analyzed more than 60 platforms and continuously provide real-time monitoring updates.

For more information about Sneaky Peer, visit their website here.

However, you can’t rely on one platform alone. It’s always best to take your time. Learn what the P2P industry is about and how to make the most out of it. It’s important to search Governmental websites to really find out additional ways on how you can avoid investment fraud.

To Sum Up

Investing is always going to be a personal choice. Whether it’s your extra cash or money straight out of your hard-earned salary, you should always be diligent in making your investment decisions. While we may have outlined some points for you, you should always go beyond this list. There may also be many investment influencers and bloggers who promote platforms out of sponsorship and affiliations instead of sound research. So, always be inquisitive and peel off the layers of marketing and hocus pocus on alternative investments.

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