Technology Due Diligence

Most companies are technology dependant to some extent, however an increasing number are claiming that technology is their key differentiator and a subset of these are claiming to be genuine technology innovators.

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However fundamental technology is to a business, it is important that an investor or acquirer fully understands the nature, characteristics, dependencies and risks around any technology that underpins that business case.

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Wherever an investment prospect sits in the spectrum of technology dependence, the Technology Investor's Advisory Service has the expertise to investigate and report, in business terms, the true commercial weighting of a company's technology and technology related assets ( such as the people, processes and market dynamics).

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We can break these down to three main scenarios:

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Technology User: All companies, regardless of whether they also fit into additional categories as well, will be reliant on 3rd party technology to run their businesses. On the whole these will be standard packages from established vendors. The way they are deployed and integrated will, however, be unique to each company. Understanding and optimising the ongoing costs, risks and exposure as a company grows, along with the possible alternative options that might be considered, can significantly affect the process efficiency and cost base of a company.

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Technology Adaptor: In order to gain competitive advantage, often to create a USP, bespoke adaptations of, and additions to, third party technology ( usually software) are developed and form an IP asset. The true value of this “Meta IP” will vary significantly and is often misrepresented by the investees and misunderstood by the investors. Meta IP is, by far, the most common asset of a technology company and the most difficult for non-specialist investors to verify, validate and value.

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Technology Creators: Genuinely innovative and game changing technology invention is very rare and potentially extremely lucrative. Truly innovative invention that is functionally unique, however, is no guarantee of commercial success. Investors need a deep understanding of: what the invention does, how it does it, the commercial value of the resultant capability and, of course, the market and competitive landscape that could overtake or nullify that advantage. Of equal significance are the people - technical, sales and management- that turn a product into a business.

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Tip :The simplest way to differentiate between adaptors and creators is look at their target customers. Adaptors will be primarily selling to end users, Creators will primarily be selling to other technologists.

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Investors :Whichever category your potential investment clients fall under, we have a package of Technology Due Diligence services to suit  you, from a high level “ snapshot” report to a full, in depth enquiry.

Business Owners: Are you selling all or part of a technology company ? Achieving a successful, profitable exit or divestment involves more than dressing up your figures and collating your contracts. TIAS can help you at every stage of that journey, including peer to peer representation of your interests with your buyer's technical due diligence team.

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