Holistic Tech Due Diligence
To get a holistic view of a software company in the context of an investment or M&A transaction, it is important to pay attention to different aspects. These aspects strongly depend on the actual context such as the investment strategy, the industry or the software product itself. However, there are four major aspects we assess in our Tech Due Diligence: Team & Skills, Processes, Technology & Tools, and Architecture & Code. In a comprehensive report with hands-on recommendations, we put the findings into the context you need.
An assessment of the team and their skill set is crucial in every Tech Due Diligence. Besides basic aspects like the organizational structure and salary levels or the duration of employment, we also examine key person risks, map the employees’ current skill set with the skill set required by the product road map and more.
Structured processes can ensure fast and efficient software development and maintenance. Hence, we investigate processes of a software company from their project management setup over the actual software development to distributing software updates or handling of customer feedback. This includes topics like the testing setup and the proper use of CI/CD.
The right technological decisions are crucial because they are long-lasting and a change of technology usually comes with great effort. Tools on the other side help the employees to combine those technologies to actually build the software. To take a holistic view, we assess the tooling, the frameworks as well as the libraries used.
Code can be of poor quality and the software architecture can be designed badly. That is why we assess a company’s software code and architecture as an integral part of our Technical Due Diligence. We review the code quality by metrics like code duplications, comment quality, code structure and much more.
Our Process
Do not longer be satisfied with traditional assessments. Get a 360° view of the current state of your tech investment and its potential for future growth.
We gain a deep understanding of your investment objectives and the technological potential of the target companies.
Our team thoroughly checks all available documents and data and contacts the most important people.
You can lean back from here: We prepare a comprehensive workshop agenda.
Our team conducts a thorough analysis of the target's technology, including an in-depth evaluation of Team & Skills, Processes, Technology & Tools, Architecture & Code.
Concerned about cyber security, GDPR compliance, or licensing issues? Our expertise can comprehensively cover these areas during our assessment.
Stay informed at your preferred level of involvement; we ensure you are always up-to-date with the latest insights and developments.
We evaluate and translate the summarized review from technical language into understandable business jargon.
You receive actionable recommendations tailored to your specific needs, along with a bankable report that empowers you to make well-informed decisions.
We develop a comprehensive roadmap focused on identifying opportunities for value creation within your IT framework.
Our Advantages
We ensure the success of software companies by analyzing more than just code metrics. Our Technical Due Diligence also includes 'soft factors' and the specific context of the target company. With quick feedback and detailed reports, we offer investors and entrepreneurs actionable recommendations. Our expertise ranges from blockchain to AI to IoT, supported by experienced industry experts.
Building success on the foundation of flexibility
Around 80% of software start-ups experience rock bottom within 3 years of being founded. We learned that simply checking code metrics does not provide meaningful results. Technical Due Diligence includes soft factors that cannot be analyzed by automated processes. It is crucial to consider the specific context of the target company, e.g. whether it is a startup, a growing or a mature company.
Agility is our guiding light
We are all about speed without sacrificing quality: After approximately five days, our clients receive the 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.
Avoid worst-case scenarios
Whether you are an investor or a Start-up, one of the worst-case scenarios are deal-breaking findings during the 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.
Deep Technology Knowledge
Let's talk tech. Whether it is blockchain, AI, or IoT, we have got the expertise to cover it all. We do not just throw around fancy terms; we bring in industry experts who have been there, done that. So when we give you recommendations, you can trust they are backed by solid know-how. We are here to make sure you are primed and ready for whatever the future holds.
Our Report
Investors benefit from final reports with actionable insights that reveal the target company's strengths and weaknesses. We estimate the effort required to mitigate risk and take into account project-specific requirements and the investment strategy. Our Tech Due Diligence covers four technology focus areas.
One report covering all relevant technical aspects
With our 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.
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.
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.
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.
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!
Our Core Expertise
Discover our core expertise, where cutting-edge knowledge meets practical solutions. We specialize in delivering comprehensive Technical Due Diligence, Open Source License Compliance, GDPR Due Diligence, Cyber Security Audits, and AI Readiness Assessments. Our team of experts is dedicated to providing insights and strategies that drive your success.
System Architecture
Development of scalable architectures incl. system design, establishment of CI/CD & DevOps.
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
Infrastructure Cost Analysis
Analysis of the cost structure when using IaaS providers and development of an exit strategy.
Licence Check
Check licences of all external dependencies, e.g. to detect copy-left licenses.
Cyber Security Audits
Carrying out cyber security audits, as well as analysing and developing backup strategies.
Data Protection Compliance Assessment
Analysis of GDPR compliance and implementation of a data protection strategy.
Low Code & Process Automation
Process modelling, automation with low/no code solutions, connection to ERP systems and document management.
Over 2,300 Deep Tech Experts
Network of more than 2,300 experts, with whom we can cover every deep tech topic.
Sell-side Technical Due Diligence
At times, the daily hustle and bustle of business can obscure our view, leaving us uncertain about whether our software or team aligns with investors' expectations.
Let's overcome these challenges together with our unique auditing process. We not only address your specific issues, but also deal with the questions that every technical manager should ask themselves:
Is your software ready to scale?
What barriers prevent your development team from achieving new heights in quality and performance?
Can your software product scale effectively with your existing team, technology, and operational processes?
How much of your product is burdened by old code and technical debt?
Why does your engineering team consistently fall short of meeting deadlines?
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.
Request sample reportFAQs
Here you will find an overview of the most frequently asked questions about our Technical Due Diligence. If your question is not included, please contact us. We are happy to discuss your requirements and questions in a 30-minute conversation.
A Tech Due Diligence report serves as a comprehensive analysis designed to clarify a target company's technical aspects. Whether you're a startup or an investor in private equity or venture capital, this report is your roadmap to understanding the technical infrastructure and capabilities. It points out both strengths and weaknesses of the company. It is a vital tool for stakeholders to make informed decisions regarding investment opportunities.
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.
The actual duration of 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 Tech Due Diligence with a team of about 20 developers on the side of the target company takes about 12 - 15 days.
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.
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.
We have fixed prices for our Due Diligence. Please do not hesitate to ask for our price list.
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.
Benefit from our network of vetted tech experts
Benefit from an extensive network of over 2,000 subject matter experts based on our cooperation with Deepsense. This collaboration allows us to offer international and scalable expertise across any technology domain and any deep tech topic.
Special circumstances often require deeper insights for accurate assessments. In these instances, our established network of experts is ready to support our projects, ensuring we deliver precise and comprehensive evaluations.
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