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Case Histories


A VC firm planning to fund an e-commerce solutions provider turned to CIS after suspicions arose about the integrity of the company’s CEO. Our eleventh hour investigation confirmed our client’s fears. The subject had previously founded, bankrupted and stripped an identical company of its assets, and then evaded creditors through an intricate network of nominee holders and foreign bank accounts. After being debriefed of our findings, our client walked away from the deal.

A portfolio company in the fiber optics industry was forced to fire its recently hired CEO after he proved incapable of handling the requirements of the position. Prior to fulfilling its contractual obligation to pay the subject a multi-million dollar severance benefit, CIS was retained to confirm his qualifications, something the company had originally neglected to do. Our investigation revealed the subject had grossly misrepresented his professional history and areas of expertise. The information enabled our client to negotiate a significantly lower severance package and reclaim the fees paid to the recruiting firm that had placed him.

An investment bank planning to take public an electronics component manufacturer retained CIS for a last-minute due diligence. Our review showed significant gaps between the company’s representations of performance, and the actual scope of revenues and plant production output. Further, our inquiry revealed ties between the company’s executives and brokerage firms under investigation for laundering organized crime proceeds. Our client quickly placed the deal on hold.

A hedge fund was considering financing a wireless networking start-up when it retained CIS to assist with the due diligence process. During our review, CIS discovered the company’s product received mixed reviews during beta testing by key users in the industry. Further, CIS learned a rival company was nearing product roll-out and had recently gained access to funding and major distribution channels through an alliance with a major telecom provider. After being informed of the increased risk, our client was able to revise the scope and structure of the investment.

A portfolio company in the software industry restructured a strategic acquisition after a CIS investigation revealed weaknesses in the target company’s performance projections. During our review, we learned that half of the subject company’s original project management staff had defected in the previous six months. As a result, customers were threatening to terminate contracts, jeopardizing revenue flow. The problem was the company’s president – recruited a year earlier – whose brash style alienated staff and clients. Based on the information, our client moved the president to other responsibilities and re-recruited the original talent responsible for the company’s success.

A VC firm was concerned about a portfolio company in the energy industry losing market share to a competitor that had developed a more efficient production technology. Over the course of 12 months, CIS provided the client with a steady stream of intelligence regarding the competitor’s marketing and strategic plans for the technology. The information enabled the client to initiate measures designed to counter the threat of the competitor’s new technology. As a result, our client’s portfolio company suffered no market share erosion during this period.

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