De-risk your software
investment opportunities.

As a boutique consultancy specialized in Tech Due Diligence on software companies, we help private equity and venture capital investors to get a clear understanding of all technical aspects of a target.

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Buy-side
Tech Due Diligence for Private Equity and Venture Capital

Our buy-side Tech Due Diligence helps private equity and venture capital investors to de-risk their tech investments. Therefore, we have developed a specific Due Diligence framework: It follows a structured, yet flexible approach. This way, we can deliver valuable and actionable insights fast. We take specific requirements into account which can originate from the investment strategy (e.g. compatibility of software with an existing product or company portfolio) or the software’s specific industry. Also, the target company’s maturity and the investment stages play a crucial role in the assessment, since it strongly shapes the context of an investment in a software company and the requirements regarding a buy-side Tech Due Diligence.

(Pre-)Seed investment

Quick and affordable Due Diligence for young companies focusing on the team and roadmap.

(Pre-)Seed investments often go along with the development of a first prototype. As it is common to build the software from scratch as soon as the business model is validated, the analysis of the code base plays a minor role. Accordingly, the team, their skills and a mapping with the product roadmap is part of our Due Diligence for seed investments.

Series A-F

Comprehensive risk analysis with insights that help the company grow further.

In later investment rounds, the team, processes, tooling and the actual produced software gets more and more important. Especially the software code and its architecture are crucial not only to handle a growing user base but also to avoid piling up technical debts.

M&A or Exit

Full Technology Due Diligence with focus on a risk analysis with a bankable report of 60 pages.

For private equity deals - to differentiate from venture or growth capital - we provide our full Technology Due Diligence with a bankable report. We follow our proven Tech Due Diligence framework and investigate software companies both holistically and in-depth.

Our buy-side Tech Due Diligence report

One report covering all relevant technical aspects

With our buy-side Tech Due Diligence, investors get a report with actionable insights which help to understand both strengths and weaknesses of the target company. Additionally, we give an estimate of how much effort it is to mitigate weaknesses and potential risks.

Besides project specific aspects as well as requirements originating from the investment strategy and other business related aspects, our Tech Due Diligence covers four focus areas on the technological level.

Team & Skills

The development team and their skill set are one of a software company’s most crucial assets. All people involved in the software development process impact both strategic technology decisions and daily operations directly.

Here are some aspects of what we assess in the focus area "Team & Skills":

Team & Organization

Employee Satisfaction & Hiring

Skills & Knowledge

Processes

Efficient processes are necessary for modern software development and its maintenance. Due to its importance especially for the developer’s daily operations, we holistically assess the target’s processes along all software development steps.

Here are some aspects we assess in the focus area “Processes”:

Project management & planning

Software testing

Distribution of new releases & updates

Technology & Tools

Tools help employees manage tasks along all process steps. Modern software development requires a broad range of tools, for project management or the actual software development. Technologies on the other hand are used by developers to build the actual software.

Here are some aspects we assess in the focus area “Tools & Technology”:

Technology stack

External dependencies

Tooling

Architecture & Code

The architecture and code is a software company’s actual product and therefore extremely important in every later-stage Tech Due Diligence. To get actionable insights, we assess both the software code and the software architecture. Therefore, we follow a mixed approach, including qualitative and quantitative aspects.

Here are some aspects we assess in the focus area “Architecture & Code”:

System Architecture & interfaces

Code Quality & maintainability

Security & privacy

Read the Full Sample Report

To get a deeper understanding of the insights that our Technical Due Diligence actually delivers, we have created a sample report. It is based on a fictional software company that is developing an ERP system. Convince yourself how our Tech Due Diligence can help de-risk your tech investment!

Request sample report

Advantages of our Tech Due Diligence for investors

Standardized – but flexible

We learned that simply checking code metrics does not provide meaningful results. Technical Due Diligence covers soft factors that cannot be analyzed by automated processes. It is crucial to take the target’s specific context into account, e.g., if the target is a startup, a growing company, or a mature company. These factors can shift the focus of an investigation and determine what is most relevant: the team’s skill set, the ability to scale respectively, or the need for a stable and easy-to-maintain system.

We take the company’s specific context into account

There are many factors that determine the value of a company, each with different weight depending on the context. If the value-driving factor is using or developing cutting-edge technology, internal knowledge and solid implementation are crucial. If the value-driving factor is not technology, using third-party solutions or old but established technologies may be the right choice.

We have an agile approach

To be able to take all the company’s specific contexts into account, we have an agile approach: after approximately five days, our clients receive a first feedback with yellow flags and critical areas we recommend them to examine further. 10 - 16 days later, our clients receive a deep dive report on these areas with 50 - 60 slides. This way, we provide a comprehensive overview of a target’s technical strengths and weaknesses, which can be understood without having deep technical knowledge.

We can help identify deal breakers early

Usually, Technical Due Diligence is conducted as one of the last steps in the Due Diligence process, since it is commonly offered as one big service bundle. Our approach, in contrast, allows for flexibility: The first investigation of a target can be placed at an earlier stage of Due Diligence processes. Potential deal-breakers might be identified early in our process, which can reduce costs enormously.

We consult industry experts

If the critical aspects we have identified require deep knowledge in a specific field, we consult our network of experts. These industry experts have deep knowledge and experience in Tech Due Diligence for prestigious investors and M&A consultancies. We consult our experts when knowledge of specific topics like blockchain, robotics, artificial intelligence, and IoT is needed.

We help create value

The actual investment takes place after we have conducted the Technical Due Diligence. Since a buy-side Tech Due Diligence is a deep-dive into a software company, we have gained valuable knowledge about all relevant aspects. With an outside-in view on technical issues, we help avoid operational blindness and biased technology decisions. With our follow-up consultations, we can provide unbiased opinions after the investment happened and help to increase the company evaluation after the Due Diligence is over.

Ready to upgrade your Tech Due Diligence?

Learn more about our team, our experience, and our services. Get in touch today.

FAQ for our Buy-side Tech Due Diligence

What does a buy-side Tech Due Diligence report look like?

We have created a sample buy-side Tech Due Diligence report. It follows our proven Tech Due Diligence approach and gives good insights how our actual reports look like and what areas and aspects they cover. You can request our sample report i nthe request section on this page..

How do you get the required insights to conduct a buy-side Tech Due Diligence?

In order to get the necessary information, we combine both qualitative and quantitative aspects with our Technical Due Diligence. On the qualitative side, we conduct interviews with key people; such as CTOs and CIOs, do product walkthroughs, check the system architecture and code quality, examine the underlying processes, and compare the company's vision and growth plan with the product road map and the employee's skill sets. On the quantitative side, we evaluate different metrics and key performance indicators, such as the proportions of code written by one person, which helps to identify key person risks.

How long does a buy-side Technical Due Diligence project take?

The actual duration of a buy-side Due Diligence strongly depends on the actual target company respectively its software products. Potential indicators for the duration of a Due Diligence project are for example the number of lines of code, the size of the software development team, the maturity of the company, the broad and width of product portfolio or the concrete software application. To give you a rough idea, our buy-side Tech Due Diligence with a team of about 20 developers takes about 12 - 15 days.

Why is it important to understand the technical side of a software company and their software products?

The digital transformation clearly points out the importance of a company's underlying technology. As quickly as companies rise or grow because of technological advantages and efficient IT-based processes, that quickly others fall behind. To understand the technical side of a software company, a holistic assessment of the development team, their processes, the used technology and the actual software code is necessary. Only this way, investors are able to assess the technological side of a software company and find a plausible price.

What is the aim of a buy-side Technical Due Diligence?

Generally speaking, the aim of a buy-side Technical Due Diligence is to help private equity and venture capital investors get a clear picture of the technical side of a target company. It points out both strengths and weaknesses of the company. This way, investors can take the technical side of the target company into account with their investment decision.