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Get ready for your exit or your next investment round.

Vendor Tech Due Diligence to prepare software companies for the investor’s Tech Due Diligence.

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Sell-sideTechnical Due Diligence for Software Companies

Our sell-side Tech Due Diligence is based on our proven and steadily optimized framework we use when conducting Tech Due Diligence for investors. Applying this framework to the vendor side as well allows to conduct a real life Tech Due Diligence. Taking the investor’s perspective into account helps to increase your investment/exit readiness efficiently. Thanks to our project experience on the buy-side, we know what private equity and venture capital investors pay attention to when evaluating a software company. This knowledge enables us to help software companies prepare for their investor’s Tech Due Diligence. Our Vendor Tech Due Diligence and M&A support focuses on three services: assessment of investment/exit readiness following our proven Tech Due Diligence approach, improvement of investment/exit readiness and guidance through the M&A process.

01
Assessment of investment/exit readiness
Discovery of current strengths and weaknesses.

To assess the investment/exit readiness of a software company, we apply our proven Buy-side Tech Due Diligence framework. This allows us to include the investor’s perspective, which is a crucial part to identify strengths and weaknesses.

02
Improvement of investment/exit readiness
Understand and resolve problems and weaknesses.

The findings in the assessment allow taking the right actions to increase investment/exit readiness. For example, to switch to another well-maintained framework or change the software architecture. Knowing what investors pay attention to allows us not only to act accordingly, but also to set the right priorities.

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03
Guidance through the M&A process
Support during the Technical Due Diligence.

While common M&A advisors can perfectly help software companies to prepare and manage common Due Diligence streams such as Commercial, Financial or Legal, they often struggle to support the Tech Due Diligence stream. Our extensive experience in Tech Due Diligence on the sell-side enables us to manage this part of the M&A process for you efficiently.

Process of a Vendor Tech Due Diligence

Along all investment stages, private equity and venture capital investors nowadays start adding tech due diligence to their other due diligence streams such as those on the commercial, financial or legal side. The increasing number of investments respectively fundings software companies get, will accelerate this trend additionally. We help succeed the investor’s technical due diligence and get a better funding or price for your software company.

With our vendor due diligence we will first simulate a real tech due diligence. Here, we apply our proven buy-side due diligence framework. In a structured way, we thereby efficiently acquire all necessary information while employees learn the process of a tech due diligence. After, we mostly together with the CTO discuss the findings and set up an action plan. The resulting tasks strongly depend on the specific findings of the vendor tech due diligence and can range from writing or updating documentations to introducing a more future-proof technology or framework. By monitor this progress, we consistently help software companies getting ready for the actual tech due diligence and make it a success!

book

Proven Vendor Tech Due Diligence

With our vendor tech due diligence, we specificially address the requirements of a software company preparing for an M&A transaction. To get the current status and setup, we apply our proven Tech Due Diligence framework. After, we consult on how to increase a software company’s investment / exit readiness on an ongoing basis.

Request sample Report

Process of a Vendor Tech Due Diligence

Along all investment stages, private equity and venture capital investors nowadays start adding Tech Due Diligence to their other Due Diligence streams such as those on the commercial, financial or legal side. The increasing number of investments in software companies is accelerating this trend. We help to navigate the investor’s Technical Due Diligence and to ensure funding and appropriate valuation for your software company.

With our Vendor Due Diligence, we will first simulate a real Tech Due Diligence. Here, we apply our proven buy-side Due Diligence framework. In a structured way, we thereby efficiently acquire all necessary information while employees learn the process of a Tech Due Diligence. Thereafter, we discuss the findings, usually together with the CTO, and set up an action plan. The resulting tasks strongly depend on the specific findings of the Vendor Tech Due Diligence and can range from writing or updating documentations to introducing a more future-proof technology or framework. By monitoring the progress, we consistently help software companies getting ready for the actual Tech Due Diligence and make it a success!

2 books

Proven Vendor Tech Due Diligence

With our Vendor Tech Due Diligence, we specifically address the requirements of a software company preparing for an M&A transaction. To get the current status and setup, we apply our proven Tech Due Diligence framework. Afterwards, we consult on how to increase a software company’s investment/exit readiness on an ongoing basis.

Request sample report

What other Investors say

Bitflow Founder Florian Weigand

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Dr. Hans-Christian Perle

Geschäftsführer
Reimann Investors
Bitflow Founder Florian Weigand

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Eike Eul

Investment Manager
Main Capital Partner
investor boriz hezog portrait image

Boris Herzog

Partner
Rautenberg & Company

Boris Herzog  With advancing digitization and a growing number of companies with (information) technology at the core of their business model, the Technical Due Diligence becomes a vital element of any due diligence process. It complements the Commercial Due Diligence to provide a holistic understanding of the scalability of a business model and the sustainability of the firm's competitive positioning. The Technical Due Diligence thus provides crucial input for valuation as well as post take-over value creation measures.PartnerRautenberg & Company

Boris Herzog

Partner
Rautenberg & Company

Advantages of our Vendor Due Diligence

Taking the investor’s perspective

Due to our extensive experience in Tech Due Diligence on software companies for private equity and venture capital investors, we can take their perspective when conducting a Tech Due Diligence. Using our proven buy-side framework, we can simulate a real Tech Due Diligence to prepare software companies for the investor’s actual Tech Due Diligence. This way we gain valuable insights which allow taking the right actions to increase investment/exit readiness.

Smooth M&A process

Common corporate or M&A advisors often struggle to prepare the Tech Due Diligence efficiently because they lack technological understanding, which often leads to delays and incomplete paperwork. With us, you benefit from our professional experience in software development and Tech Due Diligence, ensuring an efficient approach in the M&A process of private equity and venture capital investors.

Increase your company valuation

Increasing investment/exit readiness, especially by mitigating weaknesses and risks, is beneficial for the company evaluation. A Vendor Tech Due Diligence creates actual value which can increase the price of a software company. In our daily work, we see many Due Diligences where the company has poor answers to critical questions. To be prepared with all mandatory documents ready, decreases the risk of an abortion of the process and increases the likelihood of closing the desired investment round.

Avoid worst case scenarios

One of the worst case scenarios are deal-breaking findings during the investor’s Due Diligence. However, there is a big difference between a company that is aware of its weaknesses and has a plan to tackle them or a company that is unprepared. Turning a red flag into a yellow or even a green one is possible if we bring in our experience and expertise in Tech Due Diligence from early in the M&A process.

Deep technology knowledge

To help you get ready for an investment or exit, deep knowledge is required for each technology. To make sure you get reliable results for all relevant aspects, we consult industry experts. Most of them have conducted Tech Due Diligence for prestigious private equity and venture capital investors themselves. This way we can cover a broad range of topics within the Tech Due Diligence space while we remain a permanent contact person for all your topics.

Actionable insights, tasks & recommendations

Even though we take the investor’s perspective when conducting a Vendor Tech Due Diligence, the results are presented in a more technical way. This is because the aim of our Vendor Due Diligence is to provide software companies actionable tasks, insights and recommendations to increase their investment/exit readiness efficiently and with no extra loops.

Our core expertise

System Architecture

Examining scalable architectures, DevOps, as well as system and database design.

Static Code-Analysis

Code quality, test coverage and analysis of technical debts scalable to millions of lines of code.

Team Performance

Analyze commits to derive statistics and risk of key personnel.

Infrastructure Cost Analysis

Analyze the cost structure of using IaaS providers and develop an exit strategy.

License Verification

Checking licenses of all external dependencies, e.g. to detect copy-left licenses.

Safety & Reliability

Performing penetration testing (black- & white-box), as well as analyzing backup strategies.

Examples for our expertise in special areas

Artificial Intelligence

Machine & deep learning, computer vision, and new developments such as LLMs and ChatGPT.

Low Code & Process automation

Process modeling, automation with low/no code solutions, connection to ERP systems and document management.

Further Areas

Mobile apps, Internet of Things, blockchain, state-of-the-art frameworks/libraries, developer tools, and much more.

FAQ for our Sell-side Tech Due Diligence

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

We have created a sample sell-side Tech Due Diligence report which follows our proven Tech Due Diligence approach. You can request our sample report in the request section on this page..

What is the difference between buy-side and sell-side Tech Due Diligence?

For both sides, we apply our proven Tech Due Diligence framework. However, its characteristics depend on whether we conduct a buy-side or sell-side Tech Due Diligence. On the sell-side, we present our findings in a more technical way. Thereby, the development team gets actionable insights which improve the investment or exit readiness in an efficient manner.

When should a sell-side Tech Due Diligence start?

To put it simple: The earlier in the process, the better. This is because identified weaknesses or even red flags might take some time to be fixed.

How long does a sell-side Tech Due Diligence take?

The sell-side Tech Due Diligence is split up into two main phases. The first is the assessment phase where we apply our proven Tech Due Diligence framework to identify weaknesses and potential deal breakers. In the second phase, we use those insights to prepare for the investor's Due Diligence. While the first phase usually takes up to one week, the second phase is stretched over a longer period of time since the software company has to guarantee smooth daily operations besides working on the improvement of the company's investment / exit readiness. A time-frame of about 6 weeks allows a smooth vendor Tech Due Diligence which delivers real value to the company.

Why should a sell-side Tech Due Diligence be done?

A sell-side Tech Due Diligence is the perfect preparation for the investor's actual Tech Due Diligence. With our proven Tech Due Diligence framework we identify weaknesses of software companies which then can be mitigated accordingly. Thereby, a sell-side Tech Due Diligence creates real value with a strong positive impact on the investor's company valuation.

Ready to upgrade your Tech Due Diligence?

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