Pleasant Surprises
Technical due diligence is just about finding fault.
Right?
Examining the technology; looking for shortcomings that might affect your investment.
Well actually, not quite.
Interesting things happen when you bring in fresh eyes to look at a technology business. Eyes belonging to an expert who understands the business, but isn’t blinkered by submersion in it.
Often the expert discovers un-exploited opportunity. And that’s a big part of what technical due diligence is about.
We’re reminded of this almost every time we do a due diligence excercise.
Called in to assess a nanotech material for a US-based investor, our study turned up a whole new application for the technology. It opened a entirely new market for them to exploit.
Asked to look at a web-based software application, our assigned expert found efficiency improvements to create big savings for the proposition company.
Financial due diligence is always about looking for negatives. Unpaid bills, unusual cashflows, even fraudulent activity . It either comes back “fine”, or “bad”.
A technical due diligence, more than just guarding against loss, will often create value for the investor.
When was the last time your due diligence contained a “pleasant surprise”?