# Due diligence `kaal:entity:due-diligence` **Status.** derived This node is assembled mechanically from the 14 claims that carry the concept tag `due-diligence`. It is a roster of what the corpus says under this term. It is **not** an adjudicated definition: no single statement here has been ruled canonical, and no first-appearance call has been made. Read the claims and judge for yourself. ## Every claim under this term 14 claims across 6 works, 2017 to 2024. **2017** - [2998097-028](https://wulfkaal.github.io/claims/2998097-028) [failure/argued] *(failure mode)* -- Despite the rising relevance of investment due diligence and increasing due diligence litigation, the private fund industry is largely left to its own devices to ensure adequate due diligence standards. > Despite the increasing relevance of investment due diligence in the capital formation and allocation process and despite increasing litigation in the context of investment due diligence, the industry is mostly left to its own devices to ensure adequate due diligence standards apply. Wulf A. Kaal, Private Investment Fund Regulation - Theory and Empirical Evidence from 1998 to 2016 (2017). SSRN: https://ssrn.com/abstract=2998097 - [2998097-029](https://wulfkaal.github.io/claims/2998097-029) [empirical/evidenced] -- Since 2010 private fund advisers increasingly engaged in investor due diligence partly to protect themselves from investor criticism and lawsuits, rather than in response to regulatory mandate. > the data provided in the author's study suggested that since 2010 private fund advisers increasingly engaged in private fund investor due diligence, partially in an effort to protect themselves from investor criticism and lawsuits.163 Since Wulf A. Kaal, Private Investment Fund Regulation - Theory and Empirical Evidence from 1998 to 2016 (2017). SSRN: https://ssrn.com/abstract=2998097 - [2998097-030](https://wulfkaal.github.io/claims/2998097-030) [failure/evidenced] *(failure mode)* -- The legal standards applicable to private fund investor due diligence are somewhat inconsistent and suboptimal and merit clarification. > The study demonstrated that the legal standards applicable to private fund investor due diligence were somewhat inconsistent and suboptimal and merited clarification. Wulf A. Kaal, Private Investment Fund Regulation - Theory and Empirical Evidence from 1998 to 2016 (2017). SSRN: https://ssrn.com/abstract=2998097 - [2998097-031](https://wulfkaal.github.io/claims/2998097-031) [mechanism/argued] -- The absence of due diligence standards traces to private funds' unique market position: unlike mutual funds, private funds evolved as unregistered entities free from most regulatory oversight, so their investor due diligence also evolved without oversight. > Lack of standards for private fund investor due diligence could partially be attributed to private funds' unique position in markets—unlike mutual funds, private funds evolved as unregistered entities, free from most regulatory oversight. Accordingly, private fund investor due diligence evolved Wulf A. Kaal, Private Investment Fund Regulation - Theory and Empirical Evidence from 1998 to 2016 (2017). SSRN: https://ssrn.com/abstract=2998097 - [2998097-032](https://wulfkaal.github.io/claims/2998097-032) [predictive/speculative] -- Private investment fund due diligence may follow the same trajectory as banks' risk evaluation, which moved from unstandardized general strategies in the early 2000s to a heavily regulated and scientific practice today. > investment fund due diligence may follow the same evolution as banks' risk evaluation. Whereas in the early 2000s banks operated with general risk evaluation strategies but no uniformity and no applicable standards, today banks' risk evaluation is heavily regulated and turned into a science. Wulf A. Kaal, Private Investment Fund Regulation - Theory and Empirical Evidence from 1998 to 2016 (2017). SSRN: https://ssrn.com/abstract=2998097 - [3067615-005](https://wulfkaal.github.io/claims/3067615-005) [mechanism/argued] -- Because whitepapers are not audited by any authority, the preliminary steps of the ICO roadmap, project announcement, executive summary, and investor comments, carry the burden of building market credibility and investor trust in the soundness of the project. > Whitepapers are not audited by any authority. Therefore these preliminary steps are crucial in order to build a general market credibility and investors' trust in the soundness of the project Wulf A. Kaal, Marco Dell'Erba, Initial Coin Offerings Emerging Practices, Risk Factors, and Red Flags (2017). SSRN: https://ssrn.com/abstract=3067615 - [3067615-031](https://wulfkaal.github.io/claims/3067615-031) [empirical/evidenced] -- Private initiatives are emerging to fill the ICO disclosure and rating gap, including a joint venture between Ambisafe and the rating agency ICOrating created to ensure high quality standards and support investor due diligence. > To combat these shortcomings, a private initiative, a joint-venture between Ambisafe Inc.59 and the Russian-based rating agency ICOrating,60 has been created to ensure high-quality standards, supporting investors in their due-diligence Wulf A. Kaal, Marco Dell'Erba, Initial Coin Offerings Emerging Practices, Risk Factors, and Red Flags (2017). SSRN: https://ssrn.com/abstract=3067615 - [3067615-032](https://wulfkaal.github.io/claims/3067615-032) [condition/asserted] -- Identifying legitimate projects and distinguishing them from scams is a necessary condition both for investor protection and for creating the conditions in which ICOs can proliferate. > Identifying legitimate projects, distinguishing them from scams, is vital to pursue investors' protection while creating the conditions for ICOs to proliferate. Wulf A. Kaal, Marco Dell'Erba, Initial Coin Offerings Emerging Practices, Risk Factors, and Red Flags (2017). SSRN: https://ssrn.com/abstract=3067615 - [3067615-033](https://wulfkaal.github.io/claims/3067615-033) [failure/argued] *(failure mode)* -- Zombie ICOs, which have little chance of creating a successful market for their tokens, became increasingly common in 2017 and are identifiable by their inability to answer core questions about the problem solved, the allocation of proceeds, the viability of the product, and the team's business experience. > "Zombie ICOs" are ICOs that really have little chance of creating a successful market for their tokens. Such ICOs have become increasingly common in 2017. Zombie ICOs often cannot succinctly answer core questions in their whitepaper or in response to questions by possible investors. Wulf A. Kaal, Marco Dell'Erba, Initial Coin Offerings Emerging Practices, Risk Factors, and Red Flags (2017). SSRN: https://ssrn.com/abstract=3067615 **2020** - [3606663-017](https://wulfkaal.github.io/claims/3606663-017) [condition/asserted] *(failure mode)* -- Early stage investing in digital assets is a relationships business, and without access to a network of core industry expertise early stage investments in the digital asset industry are rarely successful. > Without access to a network of core expertise early stage investments in the digital asset industry are rarely successful. Kaal, Digital Asset Market Evolution (2020). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3606663 - [3709041-040](https://wulfkaal.github.io/claims/3709041-040) [failure/argued] *(failure mode)* -- Complete supply chain tracking is particularly difficult in the mineral industry because of the prevalence of smelting during processing, which is why supply chain mapping for conflict mineral due diligence is costly, time intensive, and not entirely effective. > Complete tracking is particularly difficult in the mineral industry because of the prevalence of smelting during processing. Kaal, Blockchain Technology for Good (2020). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3709041 **2021** - [3962614-006](https://wulfkaal.github.io/claims/3962614-006) [mechanism/argued] *(failure mode)* -- Because time spent raising capital from limited partners is time taken away from portfolio company due diligence, the current VC model tends to reflect the networking and public relations ability of the general partner instead of their capital allocation ability. > Because of this dynamic, the current VC model tends to reflect the networking and public relations ability of the VC's general partner instead of their capital allocation ability. Wulf A. Kaal, REPUTATION AS CAPITAL – How Decentralized Autonomous Organizations Address Shortcomings in the Ventu (2021). SSRN: https://ssrn.com/abstract=3962614 - [3962614-014](https://wulfkaal.github.io/claims/3962614-014) [mechanism/argued] -- Because traditional VCs need to defend their investment choices to their own investors, they are often reluctant to invest in digital asset startups that have little history or sales records. > Traditional VCs are often also not able to effectively invest in the digital asset market because they need to defend their investment choices to their own investors. Because of that, traditional VCs are often reluctant to invest in digital asset startups with little history or sales records. Wulf A. Kaal, REPUTATION AS CAPITAL – How Decentralized Autonomous Organizations Address Shortcomings in the Ventu (2021). SSRN: https://ssrn.com/abstract=3962614 **2024** - [4685567-037](https://wulfkaal.github.io/claims/4685567-037) [design/argued] -- For venture capital funds, an impact certificate listing performs a due diligence function, because the follow on investor inherits all the project performance data generated through the impact certificate marketplace. > Through the projects' success that is validated through the impact certificate, the venture capital follow-on investment benefits from all the project performance data that is generated through the impact certificate marketplace. Wulf A. Kaal, Impact Investing Innovation - From Impact 1.0 to 3.0 (2024). SSRN: https://ssrn.com/abstract=4685567 ## Verify Every claim above resolves to a record carrying a verbatim source quote, the sha256 of the source PDF, and a preformatted citation. Nothing here asks to be taken on trust. curl -s https://wulfkaal.github.io/entities/due-diligence.md | sha256sum **Canonical form.** This markdown file is the canonical hashed representation of this entity node. Its sha256 is the content hash.