Bo Parfet's Top 20 Investment Screening Tips

“I'm Super Busy, Deals Come My Way All the Time, But I Don't Have a Quick Vetting Process”

Investing in real estate or other ventures can be an incredibly rewarding way to grow wealth, but it's fraught with risks, especially for busy professionals who lack the time to carefully vet every opportunity. The market presents an endless stream of potential deals, each requiring thorough evaluation to capitalize on genuine opportunities and avoid potential pitfalls. As Chief Growth Officer at DLP Capital, I understand the challenges investors face when screening deals and navigating investment opportunities. The volume of opportunities can be overwhelming, and the cost of a single miscalculation can be substantial.

This article outlines my top 20 tips for screening potential investments, developed over years of institutional experience and refined through countless deal evaluations. These criteria are designed to save you time, reduce risk, and help you identify worthwhile opportunities. Most importantly, they provide a systematic framework that cuts through marketing noise and surface-level metrics. With these tips, you can cut through the clutter and eliminate unsuitable deals in as little as 5 minutes to 1 hour.

1. Must Have a Top Ten Auditor

Financial integrity forms the bedrock of any legitimate investment opportunity. While many firms claim to operate at a high level, top ten auditors bring a level of scrutiny and standardization to financial reporting that is unmatched. These globally recognized firms, like Deloitte or EY, ensure that the company's financials adhere to strict standards, reducing the risk of fraud or misrepresentation. Involving a Top Ten auditor signals a commitment to transparency that extends beyond bare-minimum compliance. If the company isn't using a reputable auditor, you’d be wise to consider it a red flag.

2. Minimum 3-5 Years Audited Track Record

Success leaves a paper trail. Market cycles reveal true operational competence and three-to-five years of audited financials tell a story that promotional materials never will. Research shows that only about 30% of businesses survive longer than 10 years, making this track record particularly insightful. These audited documents reveal patterns in management decisions, operational efficiency, and risk management capabilities. A company with a minimum of three years of audited track record demonstrates a level of stability and operational consistency that merits, at the very least, the full attention of investors.

3. Minimum $500 Million in Assets Under Management (AUM)

Scale matters in institutional investing. The $500 million threshold represents both market validation and operational sophistication, as raising this level of equity requires surviving multiple market cycles and building robust institutional processes. Managing such significant assets demands highly capable risk management systems and experienced teams. In contrast, smaller companies often lack the maturity and resources to avoid costly mistakes. When you invest with a firm that has significant AUM, you stand to benefit from their experience and infrastructure.

4. Data Room

Professional investors expect a high level of organization from any company they invest in. A well-structured, comprehensive data room is the cornerstone of any serious investment opportunity. Serving as a secure central repository, it should house critical documents such as detailed financial models, market analyses, risk assessments, and operational documentation. The quality and organization of a data room often mirror the overall operational effectiveness of a company. A missing or disorganized data room signals potential inefficiencies and makes due diligence challenging, raising red flags about the firm’s ability to manage its operations and handle investor scrutiny.

5. Investor Portal

Having access to investment data is no longer something that should be viewed as a luxury. Investors should screen for companies that provide a secure investor portal that delivers instant access to performance metrics, document archives, and communication channels. The sophistication of an investor portal often indicates a firm's commitment to institutional-grade operations, whether that be in their current or future state. It also demonstrates that the company values efficiency and transparency in managing investor relations.

6. Over 200 Investors Without One Disproportionate Stake

Healthy capitalization structures protect investor interests. A diverse investor base ensures balanced governance and aligned incentives across any platform. The presence of 200 or more investors typically indicates broad market validation and robust operational capabilities. Due diligence should include direct communication with existing investors—I recommend speaking to at least five for firsthand insights into management performance and investment experience. Watch for any single investor holding excessive control or receiving preferential treatment, especially when it comes to liquidity. If the company resists this request, consider it a major warning sign.

7. Regular Performance Reports

Professional investment management demands consistent, comprehensive reporting. Monthly updates represent best practice, though quarterly reporting should be considered the minimum acceptable standard. These reports should track key performance indicators, market dynamics, and strategic initiatives. Beyond raw data, look for thoughtful analysis and forward-looking insights that demonstrate management's strategic thinking. These reports should include financial metrics, market trends, and strategic insights to help you stay informed about your investment.

8. CEO Insights and Market Updates

Leadership transparency is often a factor that separates institutional operators from amateur managers. Regular CEO communications should provide clear market perspectives, strategic rationale, and operational insights. These updates reveal management's ability to navigate market dynamics and execute on strategy. Look for companies with CEOs who write regular updates outlining market trends, investment rationale, and future growth opportunities.

9. Thought Leadership Among Senior Leaders

Expertise manifests in market influence. Beyond the CEO, Senior leadership should also actively contribute to industry discourse through publications, speaking engagements, and media appearances. Their public presence validates their market knowledge and often correlates with valuable relationship networks. Are they on podcasts? Have they authored books or papers? Their personal brands contribute to and are a good barometer of a company's credibility and ability to attract valuable partnerships.

10. Annual Investor Events and Webinars

Is there a better way to build investor confidence in organizational leadership than frequent communication with the leaders themselves? Regular forums for direct engagement with management create opportunities to facilitate substantive discussions about market conditions, strategic initiatives, and risk management practices. In-person investor events and regular webinars strengthen the relationship between investors and fund managers, allowing for transparent communication and valuable Q&A sessions.

These are my first ten criteria, and they eliminate around 90% of deals.

The final ten, in my opinion, go a step further in separating good investments from great ones.

For those: Send me a DM with your email address and I’ll send over the complete framework with my final 10 Tips!

Bo Parfet is Head of Growth at DLP Capital, a 5+ billion-dollar company, and a 3X author, speaker, and mountaineer. He received his MBA from the Kellogg School of Management at Northwestern and a Masters Degree in Economics from the University of Michigan. Among his mountaineering adventures, he's climbed the Seven Summits and K2 and is embarking on an endeavor to ski down Mount Everest to raise money to bring eyesight to 100,000 blind people. He lives with his wife and two sons in Boulder, CO. You can find him on other social media platforms @boparfet.