How Can You Set Up an AI Assistant That Genuinely Understands Your Due Diligence Nuances?

We’ve all been there. It’s 10 p.m., and you’re staring at a (virtual) fortress of documents - a data room with a hundred files: financial data, board meeting minutes, dozens of management reports, and scattered notes from expert calls. The investment committee meeting is in a week, and the pressure is on to connect the dots, spot red flags, and build a defensible investment thesis.

The dream of artificial intelligence is to tame this chaos. But anyone who’s tried asking a generic AI chatbot to analyze a balance sheet or summarize key terms in a company’s debt facilities agreement knows the reality: it often fails. It lacks context, hallucinates numbers, and - most importantly - operates outside the secure, controlled environment that our industry demands.

The truth is, an AI assistant’s value isn’t just in the algorithm - it’s in the setup. A powerful AI that doesn’t understand what’s critical in due diligence is like a brilliant analyst who speaks a different language. To truly transform your workflow, you need to teach it to understand your nuance. Here’s how.

The Problem with "One-Size-Fits-All" AI

General-purpose AI tools are impressive, but they weren’t built for the specialized world of private capital. They struggle for a few key reasons:

• Lack of Context: These tools don’t know what to look for — they won’t zero in on the right metrics the way a seasoned analyst would.
• No Verifiability: An answer without a source is just an opinion. In due diligence, every key insight must be traceable back to its origin, whether it’s a clause in a legal document or a number in a financial statement. Generic AI rarely provides these citations.
• Security Risks: Uploading a management presentation or a target’s financial data to a public AI platform is a non-starter. Your firm loses control and auditability over the data,  and risks violating the strict compliance standards the industry is built on.

A purpose-built AI platform, on the other hand, is designed to overcome these challenges from the ground up. But even the best tool needs the right configuration. That setup can be broken into three essential steps.

Step 1: Curate Your AI’s Brain: The Firm’s Single Source of Truth

An AI is only as powerful as the information it can learn from. Before it can generate insights, you need to grant it secure access to your firm’s collective intelligence. This means creating a single, unified data environment.

• Integrate Internal Knowledge: Think of all the wisdom locked away in your firm’s servers. This includes past investment memos, historical deal performance, portfolio company reports, and expert call transcripts. A properly configured AI can instantly access this institutional memory, allowing you to find patterns or data points from a deal five years ago as easily as you can search your email.
• Connect External Data Streams: Your team relies on external databases like Capital IQ, PitchBook, and other market intelligence sources. A specialised AI platform can integrate seamlessly with these tools, allowing you to pull and analyze third-party data that your team will not juggle between data platforms.
• Establish Secure Workspaces: Not everyone in the firm should see every deal. Setting up secure, project-level workspaces is crucial. This ensures that for highly sensitive projects, only the assigned deal team can access the relevant information, replicating the "Chinese walls" essential for compliance.

By centralizing your data, you’re not just feeding the AI; you’re building a foundational brain that understands the complete context of your firm’s world.

Step 2: Teach the AI Your Firm’s Playbook

With access to the right data, the next step is to teach the AI what to do with it. This is where you customize the platform to automate your firm’s unique workflows, turning it from a simple search tool into a proactive team member.

• Generate Custom Due Diligence Checklists: Every firm has its own diligence know-how. A sophisticated AI should support both: leveraging your firm’s existing knowledge base and offering AI-driven recommendations for diligence checkpoints;  depending on whether you're evaluating a tech startup, a real estate asset, or a philanthropic investment. Even better, it can automatically generate sourced answers to checklist questions, dramatically accelerating the initial screening process.
• Automate Memo and Document Drafting: If your team is still spending hours drafting investment memos, it’s time to rethink that workflow. An AI assistant built for finance can automate this “grunt work.” It pulls relevant data from your sources to produce investor-ready memos that follow your firm’s preferred structure - complete with citations and formatting tailored to your standards.
• Accelerate Financial Analysis: Say goodbye to endless hours in spreadsheets. With the right configuration, AI can instantly run key analyses - from seasonality analysis to peer comparisons, and even building LBO models — all within your existing workflows.

Step 3: Build a Digital Fort Knox Around Your Data

None of this matters if your data isn't secure. In finance, security isn't just a feature; it's the foundation of trust. Setting up the right security and compliance framework is non-negotiable.

• Prioritize Certified Security: Look for platforms with certifications like SOC2 and ISO 27001. These aren’t just acronyms; they are rigorous, third-party audits that verify a provider’s commitment to enterprise-grade security.
• Insist on Data Isolation: Your firm’s data should be stored in a completely isolated environment. This ensures that your information is never commingled with that of other clients and is never used to train external AI models.
• Choose the Right Deployment Model: The most secure firms often require control over their infrastructure. That’s why flexible deployment is key. Whether you need a fully on-premise solution where data never leaves your servers, a secure private cloud environment, or a hybrid model, the platform should adapt to your firm’s specific compliance needs.

From a Tool to a Teammate

Setting up an AI assistant for due diligence is less about technology and more about strategy. It requires a thoughtful approach to curating data, customizing workflows, and fortifying security.

When done right, the AI becomes more than just a tool. It becomes a true partner in the investment process: one that can instantly recall key facts, automate repetitive tasks, and analyze data at a scale no human could. It handles the manual work, allowing your team to focus on what they do best: building relationships, thinking critically, and making high-conviction decisions.

Ready to transform your analysts into 10x performers and elevate your firm's productivity? Promenade AI is an advanced artificial intelligence platform specifically purpose-built for financial deal teams. We help you streamline investment workflows by automating research, accelerating due diligence, and instantly drafting critical deal documents.