Software IP Audit

An IP audit is a structured assessment of a company’s intellectual property assets, with a focus on software ownership, third party components, and legal exposure linked to code usage. For software driven businesses, it verifies that the company actually owns or is properly licensed to use the technology it commercialises.
This includes reviewing open-source components, third party libraries, and proprietary code to identify risks that could affect monetisation, distribution, or valuation. An IP audit is particularly relevant ahead of fundraising, acquisition, or strategic partnerships, where unclear IP ownership or licensing issues can create deal friction or pricing pressure.

An IP audit identifies risks that could affect a company’s ability to commercialise, scale, or defend its software assets. This includes open-source license risks, such as the use of copyleft licenses that may impose disclosure or distribution obligations if not properly managed. It also surfaces IP ownership conflicts, for example where code was developed by contractors, former employees, or third parties without clear assignment of rights. In addition, an IP audit can highlight litigation exposure linked to license non compliance, unclear provenance of code, or reliance on third party software without valid commercial entitlements.

An IP audit includes a structured review of the software assets that underpin a company’s product, with a focus on ownership, licensing, and commercial exposure. The process begins with a proprietary code scan to analyse the codebase and identify all third party and open source components in use, enabling the creation of a comprehensive open source license inventory and SBOMs. These outputs form the basis of the IP risk assessment. Findings are then discussed with management and technical leads to validate actual usage, clarify deployment scope, and distinguish production code from legacy or non product elements. The results are consolidated into an investor ready report that clearly presents identified risks, their implications, and recommended next steps

A Software IP Audit combines secure code scanning with expert-led validation to identify and assess IP risks accurately. The process starts with a secure scan of the proprietary codebase using Vaultinum’s isolated infrastructure, ensuring source code confidentiality and non-retention. The scan generates an inventory of third party and open-source components and flags potential licensing constraints that could affect commercialisation. Results are then reviewed with management and technical leads to confirm what is actually used in the product, filter out false positives, and distinguish legacy code, unused dependencies, or non-production elements. This contextual analysis ensures conclusions reflect real IP and licensing exposure rather than purely scan driven findings.

A Software IP Audit plays a central role in IP due diligence by providing clarity on software ownership, licensing, and third-party dependencies that underpin the product. It helps identify issues that could affect valuation, such as unaddressed open-source obligations or gaps in commercial licensing, before they surface late in the process. By clearly documenting IP risks and remediation paths, the audit supports transaction risk mitigation and reduces uncertainty for buyers and investors. It is also frequently used to inform warranties and indemnities discussions and to support insurers when underwriting transactional risk coverage.

A company should conduct a Software IP Audit ahead of any transaction where software value is central to the investment thesis. It is commonly performed as a pre-acquisition audit, either in preparation for buyer led Tech Due Diligence or as part of a vendor due diligence process. Running the audit early allows IP risks to be identified and addressed before they become negotiation points, helping avoid delays, valuation pressure, or last-minute remediation. It is also relevant prior to fundraising, carve outs, or strategic partnerships, where clear visibility on software ownership and licensing is required to support a smooth and credible diligence process.

After completing a Software IP Audit, the company receives a set of clear deliverables tailored to both technical and transaction stakeholders. This includes detailed SBOMs generated from the code scan for technical teams, as well as a simplified SBOM in PDF format designed for business, legal, and investment teams. The audit also produces an investor ready IP report summarising key findings, identified risks, and recommended actions. Where relevant, a list of known CVEs associated with identified third party libraries is provided, supporting broader technical due diligence and risk assessment.