Key points to remember about Continuous Diligence Continuous Diligence is an ongoing technology analysis service that allows investors to monitor an asset between the acquisition Technical Due Diligence and the Vendor Due Diligence at exit. It...
Articles
All our articles on Tech Due Diligence
This section of Vaultinum’s blog is designed to help you understand the key issues surrounding Tech Due Diligence. It offers in-depth insights into the assessment of technology assets, the management of technical debt, cybersecurity, intellectual property, AI and scalability, providing guidance to support your investment strategies and decision-making.
What is a MOAT? Understanding its application in the tech industry
Key points to remember about technological MOAT: MOAT refers to a structural barrier that protects a company's profitability. The concept was popularised by Warren Buffett and formalised by Morningstar. A wide MOAT allows high margins to be...
Investor guide: Red Flag Report vs. Tech Due Diligence
Rather than presenting exhaustive details a Red Flag Report focuses on priority issues that require urgent attention, enabling deal teams to make informed decisions swiftly. These red flags typically revolve around technological scalability,...
A case of AI washing: lessons from the Builder.ai collapse
Key takeaways about the Builder.ai collapse and AI washing The collapse of Builder.ai exposed the hidden risks behind overhyped artificial intelligence claims and laid bare a broader phenomenon: AI washing. Builder.ai claimed to automate software...
Must AI systems comply with the GDPR?
AI Act or GDPR: which legal framework applies to my AI system? The GDPR applies wherever an organisation processes personal data—whether for communication, commercial or analytical purposes. The AI Act applies where an Artificial Intelligence...
What is Portfolio Monitoring? A guide for Private Equity investors
Key takeaways about Portfolio Monitoring for Private Equity investors In tech investments, value creation during the holding period depends on the fund’s ability to accurately track the asset’s performance beyond financial health, including...
The Private Equity glossary for tech investors
ARR (Annual Recurring Revenue) A key metric for subscription-based businesses, particularly in SaaS companies, indicating predictable revenue generated annually. High ARR signals strong customer retention and growth potential, making it a...
Scoping Tech Due Diligence: adapting to deal structures and context
Understanding the scope of Technology Due Diligence Tech Due Diligence aims to evaluate various aspects of a company's technology stack, software architecture, security, scalability, and compliance with intellectual property (IP) and licensing...
ISO 27001 qualification: a guarantee for digital asset security
ISO 27001: an international framework for security management ISO 27001 is an international standard defining an Information Security Management System (ISMS). It enforces a structured methodology for identifying, evaluating, and addressing risks...
Understanding DORA regulation: what are the implications for investors?
Objectives and scope of DORA DORA aims to establish a harmonised framework for managing technological risks across the European financial sector. It applies to a wide range of stakeholders, including banks, insurance companies, payment...
Understanding Cloud Costs in Technical Due Diligence
Why Cloud Costs matter in Tech Due Diligence Cloud expenses refer to the costs associated with using cloud-based services, including compute power, storage, networking, and additional features like managed databases or serverless functions. These...
Ten questions to ask during Tech Due Diligence
1. How do you balance architectural trade-offs between scalability and maintainability? This question strikes at the heart of system design. It acknowledges that every technical decision involves trade-offs and invites the CTO to explain the...
Enhancing Tech Due Diligence with Network Footprinting
What is Network Footprinting? Network footprinting is a reconnaissance process used in cybersecurity to gather information about a computer network. This information-gathering phase is typically the first step in assessing a network’s...
Value creation through technology: strategies for Private Equity firms
The strategic importance of technology in PE value creation Since the pandemic, there has been a notable trend of companies rapidly adopting new technology to maintain daily operations during lockdowns. This urgent need has fostered a broader...
AI investments: disruption in the software industry
Market evolution: adapting to the Generative AI landscape The integration of generative AI into the software industry marks a pivotal shift in market dynamics, redefining competitive paradigms and operational strategies. As highlighted in the...
Addressing technical debt: a priority for maximising ROI
What is ‘technical debt’? Technical debt is a metaphorical term used in software development to describe the implied cost of additional rework caused by choosing an easy (or quick) solution in short term instead of using a better approach that...
AI Audits by Vaultinum
AI Maturity audits: ensuring authenticity in AI systems One of the key AI audits offered by Vaultinum is an AI maturity audit, which plays a critical role for companies looking to demonstrate the authenticity and value of their AI systems,...
Enhancing M&A success with Vendor Due Diligence Tech
What is Vendor Due Diligence Tech (VDD)? Vendor Due Diligence Tech refers to a comprehensive evaluation of a company's technical assets, processes, and infrastructure conducted from the perspective of the seller to present to potential buyers....
SaaS Migration: A Comprehensive Guide for Software Businesses and Investors
The SaaS PhenomenonKey Drivers of SaaS PopularityThe SaaS model has seen exponential growth due to its numerous advantages over on-premise software deployments. For example, 47% of venture capital funding in 2023 went to companies with a SaaS...
Companies Re-Assess their Environmental Stance as New Stringent Regulations Loom
The impact of this decision will be unprecedented. 46 countries are part of the European Convention on Human Rights, including all of the European Union countries. More than 600 million people’s human rights are concerned. Against the back drop of...
Software failure: UK Post Office’s Misplaced Technology Trust
The human cost of blind technology trust This episode lays bare a profound miscarriage of justice, where the perceived infallibility of a software system led to the baseless vilification of innocent individuals. It exposes a critical software...
AI Washing: How to assess the real value of AI
The AI Bandwagon: More than just a buzzword The real game-changer in recent years has been the rise of generative AI. This type of AI goes beyond the predefined functionalities of earlier applications, venturing into the realm of creating new...
What is code quality and why is it important?
Key takeaways about code quality and why it matters Code quality refers to software that is maintainable, efficient, reliable, and secure, and for companies and investors, it represents a strategic asset that underpins operational efficiency,...
2024 Tech Trends: AI, Cybersecurity, SaaS and Green Tech
The Evolution of Artificial IntelligenceArtificial intelligence continues to advance at an unprecedented rate. Generative AI models, particularly known for their ability to emulate and enhance human processes, are increasingly being integrated into...
The rising tide of data breaches in 2023
The escalating landscape of data breaches This year, the complexity and frequency of data breaches reached alarming levels. IBM's study revealed that the average data breach now burdens businesses with costs upwards of $4.24 million, a 10% hike...
Cybersecurity Checklist and Cyber Health Check
1. User Access ControlControlled user access is paramount for any business serious about its cybersecurity. Access rights should be meticulously determined and conferred according to roles within the organization. Every employee ought to have...
Include a source code scan to your escrow for more Security
The intersection of security, code scan and escrowIn essence, the software escrow agreement is designed to mitigate risk. Should the software vendor fail to provide necessary updates, maintenance, or go out of business, the escrow releases the...
Managing open source software integration in software development
Why choose open source in software development? Open source software grants users access to its source code, encouraging collaboration and transparency. This model of software development has revolutionised the technology industry, introducing a...
Tech Due Diligence, integral to a Business Continuity Plan
What is Tech Due Diligence and why is it important? Tech Due Diligence refers to the process of assessing and analysing a company's technological assets, including software, hardware, digital infrastructure, cybersecurity measures, and intellectual...
Why A Software Bill of Materials (SBOM) Is So Important
Understanding the SBOMAt the heart of any piece of technology lies its source code, a complex map that determines the functionality, scalability, and overall operation of a product. Deep within this map, we find the Software Bill of Materials...
Most Common Tech Mistakes Detected by our Software Scan
Neglecting Proactive Cybersecurity MeasuresIn an era of escalating cyber threats, the importance of proactive cybersecurity cannot be overemphasized. So, it is surprising that our software scan often highlights that many companies adopt a reactive...
Review: What Can We Learn From the Cyberattacks in 2022?
The Scale of Cyberattacks in 2022Last year, the frequency of cyberattacks skyrocketed by 600%, a staggering increase that highlighted how the COVID-19 pandemic has amplified cyber risks.¹ Public sector institutions, including hospitals and local...
Cybersecurity Best Practices
Common vulnerabilities and their real-world impact Cybersecurity breaches are not just hypothetical threats, they are real, impactful, and alarmingly frequent. To illustrate the depth of these threats, we will spotlight a few common vulnerabilities...
Technology as a Service, applied to Tech Due Diligence
Tech Due Diligence in the age of digital transformation In the old model, Tech Due Diligence was conducted by teams of consultants who would manually audit a company's technology stack, infrastructure, and code. While this traditional method is...
Technology Due Diligence in mergers and acquisitions (M&A) – Guide
What is Technology Due Diligence in mergers and acquisition? Technology due diligence in M&A is an in-depth evaluation of the target company's technology stack, operational infrastructure, and ability to scale. This process scrutinises the...
Why and how to audit software before an acquisition
What is a Software Audit?A Software Audit is a comprehensive review of the software used in your organisation. It helps you identify vulnerabilities, ensure compliance, and assess the overall quality of your software. With the increasing reliance...
Tech Due Diligence at Vaultinum: how we do it
A comprehensive, company-driven self-auditOur Tech Due Diligence process starts with an informed, company-driven self-audit via online questionnaires. These questionnaires, as well as the resulting report and recommendations, have been meticulously...
Tech Due Diligence best practices: what to embrace and avoid
Key takeaways about Tech Due Diligence do’s and don’ts Tech Due Diligence is a critical step in the acquisition process to evaluate the target company’s technology assets and make informed decisions. A thorough Tech Due Diligence must include a...
Technical Due Diligence for startups and emerging companies
Key takeaways about Technical Due Diligence for startups and emerging companies Technical Due Diligence is a critical process for assessing the technological capabilities and potential risks of a company before making investment decisions, by...
Should Tech Due Diligence be data driven?
Assessing data quality and integrity Tech Due Diligence relies heavily on the accuracy and reliability of the data being assessed. High-quality data allows investors to make informed decisions, while poor quality data can lead to erroneous...
Tech Due Diligence: base for a Strategic Due Diligence
Tech Due Diligence helps investors and other stakeholders identify potential risks and opportunities that may impact the success of an investment or partnership. It provides valuable insights into a company's technological capabilities and can...
Technology Due Diligence: Data Driven vs Human Approach
The Data Driven Technology Due DiligenceData driven Technology Due Diligence is an automated process that uses algorithms to analyse large amounts of data and code lines. It involves scanning the company's source code to identify vulnerabilities...
Technology Due Diligence and Business strategy alignment
What is Technology Due Diligence ? Tech due diligence is a systematic evaluation of a company's technology assets, infrastructure, and capabilities to determine their fitness for purpose and alignment with the organisation's goals. This process is...
How to avoid the risks of open source licences?
Open source licences represents a €5,5bn market in the UK alone, based on 2022 figures published by the CNLL (National Council of Free Software). Before adopting this solution, it is essential to take all the security, legal and practical risks...
Understanding Open-Source Software Risks
The Security Paradox of Open Source SoftwareOne of the most prominent open source software risks is security vulnerabilities. The collaborative nature of open source projects can lead to faster development and better quality with “more eyes on the...
How to prepare for an IT Due Diligence: a comprehensive guide
1. Assess and document your IT infrastructure Begin by evaluating your current IT infrastructure, including hardware, software, network architecture, data storage, and security protocols. Document every aspect of your infrastructure to help...
How to Choose the Right Technology Due Diligence Provider?
Expertise in Source Code ScanningOne of the most important aspects of technology due diligence is the review of the target company's source code. Source code is the underlying programming language used to build software applications, and it can...
All you need to know about Software IP Audits
In today's digital landscape, intellectual property (IP) has become a crucial element of business success. Protecting your software assets is essential to maintaining a competitive edge in the market. This is where IP audits come into play. The IP...
The Top 4 Tech Risks Revealed by a Technology Due Diligence
Key takeaways about the Top 4 Tech Risks Revealed by a Technology Due Diligence: Technology Due Diligence involves a thorough evaluation of a company's computer systems, including its hardware, software, and online presence, to identify potential...
The ulimate guide to Tech Due Diligence
Key takeaways about Tech Due Diligence (3–4 points) Tech Due Diligence (Technology Due Diligence) is the process of evaluating a company’s technology assets and intellectual property to identify potential risks or issues, especially in the tech...
How to perform a Tech Due Diligence on a software company
Key takeaways about how to perform a Tech Due Diligence on a software company A Tech Due Diligence is crucial for tech investors and M&A lawyers, and involves a comprehensive review of a software company’s technology stack, including software...
Reduce Your Investment Risk: Open Source Vulnerability Scan
All across Europe, we are witnessing astonishing levels of growth within the tech sector, thanks to business decision makers increasingly making this area a priority for their investments. In fact, the UK is one of only three nations worldwide to...
Theranos: why a Technical Due Diligence is important
It’s a cautionary tale for investors everywhere. The case of Theranos and its founder Elizabeth Holmes— who at one point was named the world’s youngest billionaire- has been examined numerous times in books, podcasts and...
3 Key Trends Driving M&A in 2022
While the world has faced major challenges from the ongoing COVID-19 pandemic, these disruptions have also created many opportunities. Nowhere is this truer than in the technology industry, which has been by far the most active area for...
Responding to the Rise in M&A Activities
If 2021 was a big year for European dealmaking, 2022 looks set to be even better. Currently the UK is western Europe’s M&A hotbed, accounting for more than 32% of deals in 2021 (1) and has seen a £1.1 billion increase in domestic M&As in...
Tech Due Diligence Checklist: questions to prepare for Technical Due Diligence
What is a Tech Due Diligence? Tech due diligence is a comprehensive evaluation of a company’s technology assets, processes, and capabilities, typically conducted during mergers and acquisitions (M&A), investments, or partnerships. The goal is...
Top 3 risks to be aware of in High Tech M&A deals
1. Cyber RisksM&A transactions are fertile ground for cyber criminals providing them with both short and long term opportunities. In the short term, with business operations in transition, data is more vulnerable and at higher risk of...
Global trends in cyber risk
Ransomware on the rise The scale and scope of ransomware attacks are increasing at an unprecedented rate. This is due to a combination of factors including the rapid rise of digitalization, growing use of cryptocurrencies, increased geo-political...
Why is Due Diligence important?
What is Due Diligence and why is it important? Due diligence is a process that involves checking the validity of a position, action or status. It is the opposite of negligence, or the accepting of things at face-value. The origins of the term "due...
Due Diligence in merger and acquisitions (M&A)
What is Due Diligence in acquisitions? Distilled down to the simplest terms, acquisition due diligence refers to an investigative audit of any business that another firm is thinking of taking over. It is done to confirm all facts and figures that...
Due Diligence: the precautionary principle in business
What is due diligence? Due diligence is the process by which a company verifies the financial, legal and administrative status of each business to be acquired or assimilated in the context of a merger. The audit carried out takes into account the...