Sabio Tech Partners

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The Importance of Deal-Focused Technology Due Diligence

Your deal thesis is not only central to what YOU do – it’s also central to what WE do.

We don’t assess a target company’s technology against some mythical idealistic vision.  Our technology due diligence process focuses exclusively on your deal thesis.

Because your deal thesis outlines discrete business objectives in order to create value during the holding period, you need to know if the technology your target company uses to run its business helps enable that thesis or actually hinders it.

You need to know how much technical debt the target company has accumulated and how much risk that may present to creating value. 

You need to know if the target’s technology is flexible enough to support a new business model, a new sales approach, a new product line or the growth you expect.

For example, if your target company has multiple product lines that operate in somewhat independent divisions, you may plan to sell each division separately at different times.

This exit approach has major technology implications and the technology roadmap needs to reflect this by keeping systems separate rather than consolidating to gain economies of scale and take out costs.

Or you may be looking to introduce a new business model to create value.  If the target company is not using modern cloud-based technology in key parts of the business, it may take longer than expected to scale the technology and, therefore, delay the returns outlined in your deal thesis.

These are a just a couple of straightforward examples – our technology diligence addresses all such situations and aligns to your overall diligence process, allowing you to fully incorporate technology into your decisioning.

When you work with us, you should expect that the first question we will ask you is “What is your deal thesis?”.  Everything we do is based on how you answer that question.