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Due diligence

In 2011, Cogney’s founder, Doug Pierce, co-founded a consultancy called Digital Due Diligence (“DDD”) in New York City. Based largely on Doug’s mastery of SEO, the mission of DDD, in drastically simplified terms, was to assess the robustness of internet businesses built on supposedly substantial amounts of traffic. At the time, DDD was the first company of its kind, breaking new ground in a relatively new industry. During the same period, Doug assisted The New York Times to uncover unsustainable and illegitimate SEO tactics being utilized by businesses seeking to gain an edge in search results, in a multi-year series of investigative exposés.

Fast forward to now and the internet is no longer a separate industry but the backbone of business. All this time, SEO, the crucial nexus between sellers and buyers, has remained the cornerstone of commercial success for most online businesses. Doug has maintained leadership throughout by staying on top of - and setting - the latest trends in SEO and working with clients who are pioneers in their industries.

At Cogney, Doug continues to consult on bespoke investigative research assignments in the following general contexts:

  • Assisting investors to value a company when the primary driver of that value is internet traffic;
  • Giving financial institutions and corporations insight into counterparty or investee risk when they are contemplating transactions with a company whose main value to them is their online traffic. Such transactions include mergers, joint ventures and acquisitions;
  • Identifying suitable companies for acquisition or partnering with, based on the specific commercial objectives of the client company.
  • Giving a clean bill of health to an online company intent on proving that it does not engage in unsound or unsustainable SEO practices.
  • Analyzing the relationship between user behavior and financial outcomes of companies, investee, portfolio or otherwise:
    • To identify and address weaknesses;
    • To increase users and/or revenue;
    • To assess how they stack up against competitors.

Many assignments are unprecedented meaning that they draw on both Doug’s many years of experience and voracious learning. But to give you an idea of cases where digital due diligence is warranted, here are some sample factual scenarios:

  • A buyout firm assesses a catalog company with a rapidly-growing website. Do they value the website as a way to reach new markets, or merely as a way to sell to existing customers?
  • A major game studio considers buying a small competitor whose biggest hit has a great viral coefficient but a worrisome churn rate. How soon will it churn through its entire potential market?
  • A marketing software firm considers buying out a pay-per-click bid management system. How does it stack up to its top competitors?
  • Helping a business development executive understand the full dimensions of a partnership with an online distributor.
  • Assisting an investment bank’s due diligence team in assessing the value of a potential early-stage acquisition.
  • Working with a hedge fund to evaluate the competitive risks faced by a dot-com equity they’re investing in.
  • Evaluating affiliate networks for an ecommerce company seeking to buy or partner with one in order to increase sales.

It’s important to note that Cogney does not offer proprietary information. In fact, we insist on citing our (public) sources at all times. We also typically work alongside traditional bankers and industry analysts.

Every due diligence assignment is different, so do get in touch with us to discuss your specific needs if you believe your company could benefit from Cogney’s top-notch research and insight. (To get an idea of some of our sleuthing, our media page provides a glimpse into some of the assignments we’ve tackled over the years.)

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