STOP HIRING ON HOPE: THE OFFER LETTER SHOULD ENABLE DUE DILIGENCE, NOT BYPASS IT

Private Equity hiring is high stakes. One wrong executive hire doesn’t just cost salary and fees — it burns time, distracts the board, destabilises the team, and can destroy value creation momentum.

Yet most PE firms and portfolio companies still make the same structural mistake:

They blur the line between an offer and a contract.

That’s how you end up “committed” before you’ve done proper due diligence.

Raw Selection has created a template conditional offer letter designed specifically for Private Equity and PE-backed businesses. The goal is simple:

• Separate the offer from the employment contract
• Make the offer conditional on robust pre-employment due diligence
• Give you the ability to run effective DD on every candidate — without legal ambiguity and without sloppy backtracking

This isn’t admin. It’s risk control.

WHY SEPARATING THE OFFER FROM THE CONTRACT MATTERS

A conditional offer letter should do three things:

1. Lock intent
• Everyone knows the role, start date intent, and headline terms.
2. Protect the business
• You are not legally bound into employment terms while checks are outstanding.
3. Enable proper diligence
• It creates the structure to verify the person you think you’re hiring is the person you’re actually hiring.

Too many companies rush to “get it signed” and then treat diligence as an afterthought. That’s backwards. In PE, diligence is the whole game — and it shouldn’t stop at the investment.

THE DUE DILIGENCE EVERY PE FIRM SHOULD RUN (WHERE LAWFUL AND APPROPRIATE)

If you’re hiring a CEO, CFO, COO, VP, or any leader with influence over money, people, customers, compliance, or systems — this should be standard.

This offer is made subject to the following conditions:

• Receipt of three satisfactory references from previous line managers or company directors/executives;
• We may contact previous employers and other organisations with which you have worked, including individuals who can verify your work history and performance. Your current employer will not be contacted without your express written consent.
• Completion of all necessary pre-employment background checks, which may include:
• Verification of identity and right to work in the US;
• Confirmation of employment history and qualifications;
• Criminal record checks (where lawful and proportionate to the duties of the role);
• Credit and financial checks (where relevant to the role);
• Directorship, conflict of interest and business registries checks;
• Review of publicly available professional information (e.g. LinkedIn, online registers).
• Drug and alcohol employment checks

My view: if you aren’t doing this, you’re gambling.

And the biggest irony is this: the more “impressive” the candidate, the more disciplined you should be. Senior executives are better at telling a story. Diligence is how you separate story from substance.

“BACKDOOR REFERENCES” ARE NOT OPTIONAL — THEY’RE THE POINT

Provided references are table stakes. They’re curated.

The real insight comes from:

• former peers
• former direct reports
• cross-functional stakeholders
• customers / suppliers (where appropriate)
• prior board members and investors (where feasible)

That’s where you find out:

• what they’re actually like under pressure
• whether they build talent or churn it
• whether they own mistakes or spin them
• whether they can operate in a high-accountability environment (i.e., PE)

Your offer letter needs to give you the permission and structure to do this properly, while still protecting the candidate’s current employment situation.

WHAT THIS TEMPLATE DOES DIFFERENTLY

Most templates fail because they’re generic HR documents. This one is built for PE reality:

• Clear conditionality: no ambiguity that the offer depends on checks.
• DD baked into the process: references + verification + background checks are explicit.
• Current employer protection: you can diligence properly without risking their current job.
• Contract separation: the contract follows after satisfactory checks — not before.

It’s a simple change that stops a lot of expensive problems.

THE STANDARD YOU SET HERE CHANGES WHO YOU ATTRACT

High performers respect high standards.

When your process includes structured diligence, it signals:

• you’re serious
• you’re professional
• you don’t hire emotionally
• you protect the asset

That improves candidate quality over time because the wrong people don’t like scrutiny. The right people expect it.

DISCLAIMER

This blog and any referenced templates are provided for general informational purposes only and do not constitute legal advice. Employment, privacy, and background-check requirements vary by jurisdiction and depend on the role and the facts. You should obtain advice from qualified legal counsel before using or adapting any offer letter or due diligence process, and you should only conduct checks where lawful, proportionate, and appropriate.

WANT THE TEMPLATE?

Download Below.