What It Takes to Diligence Modern Software Investments

Thinktiv
3 min readJun 29, 2020

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Traditional technology diligence is a one-dimensional approach that can’t spot the new risks inside today’s increasingly complex software environments.

Rather than looking at technology in a vacuum, our pre-transaction diligence programs integrate customer, product, technology, and go-to-market perspectives into a single holistic analysis. We systematically evaluate the quality and maturity of a company through 25 diagnostic modules — proven to identify areas of hidden concerns.

Informed by decades of operating experience, our full-spectrum diligence reports provide you a clear set of actionable recommendations. Coupled with a prioritized value creation roadmap, we help you drive enterprise value post-transaction.

Whether you’re acquiring a pure SaaS business or a technology-enabled services company, Thinktiv helps you identify transaction risks while uncovering the best opportunities for value-creation.

We’ve found these considerations critical to uncovering hidden risks and opportunities within a target acquisition, and we recommend you add them to your standard diligence process as helpful.

Product Roadmap & Strategy Development

  • Does the target rigorously develop product roadmaps based on measurable intrinsic factors and extrinsic market signals?
  • Does the target effectively leverage the voice of customer research to inform product strategy?
  • Is product strategy is owned by a clearly defined individual or team but informed by cross-functional groups across the organization?

Product Development Process

  • Does the target’s roadmap set achievable milestones backed up by historical velocity and understanding of effort?
  • Are the development practices at the target collaborative and iterative with processes for team idea generation and course correction?
  • Does the technology team at the target consider user workflow in its feature releases?

Architecture and Technical Debt

  • How is infrastructure set up to support planned future development?
  • How are resources allocated to ensure stable architecture for current and future builds?
  • Are flexibility, integrations, and responsiveness considered in long-term development strategy?

Technical Risk

  • Is the target supporting multiple builds and architectures, and what are the costs of maintenance and breakage?
  • Does the target have rigorous testing procedures for feature releases?
  • What are the security protocols in development and maintenance at the target, and are they regularly reviewed and documented?

Product Market Positioning

  • Are all differentiated product features highlighted and explicitly paired to customer pain points?
  • Does the Company identify its target audience and seek to tailor its touchpoints to its language and aesthetic?
  • Do customers see clear solutions to their most urgent needs?

Test the maturity of your product diligence

Thinktiv’s one-minute digital assessment will help you understand where product strategy may impact your current investment’s risk.

We have helped hundreds of software companies plan and build winning products in a variety of industries and growth stages. This experience has allowed us to build robust, codified approaches to investment diligence. For every business we look at, we start by evaluating and aligning the product strategy.

Thinktiv is a consulting firm headquartered in Austin, Texas. We partner with private equity sponsors and executive teams to transform software and tech-enabled companies into the most valuable versions of themselves. Established in 2005, we’re an expert team of business operators and software technology pioneers that uniquely weave customer & product experience, corporate strategy, and transaction advisory into our approach which we call Integrated Value Creation. Let’s connect on Twitter or LinkedIn or work with us to create more value.

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Thinktiv

Thinktiv is the only value creation consultancy that offers an integrated solution built to achieve growth within the transaction lifecycle.