investment fund management tips

Important lesson for Fund Managers

On my first call as a Tech Advisor to the investor board, I asked "When was the last time you did Tech-DD for this portfolio company?"

"A couple of years ago, when we invested in them, why?"

"So how are you ensuring that the technology then, is still relevant and will be capable of handling the future scalability?"


And suddenly the room converts into a pin-drop-silence zone.


This has now become a pretty common scenario on our first call, when I join the investment fund as a Tech Advisor.

Often, funds are very vigilant about the tech-stack and capabilities of the entity while they are investing into it. But technology is not a static thing. Not only it changes rapidly, it advances at an unprecedented speed. What was the start-up’s first mover advantage yesterday, can become a commoditized solution today, and may become obsolete tomorrow.

In such rapidly changing scenarios how can fund managers ensure that their tech investments are safe and have competitive advantage to guarantee the expected ROI?

Especially in a world we are living today, where every business depends heavily on technology to achieve efficiency and scalability, to run their everyday operations and to take quick decisions, investment funds must be careful of keeping a check on the tech-stack of their portfolio - whether it's a tech company or not.

Regular tech-assessments not only tell you about the risks you might be running through but also additionally helps to,

  • Find out new areas to build technological innovations, that can become the company's competitive advantage, and IPRs
  • Find out new opportunities to leverage and optimize existing stack for better performance
  • Reduce operational costs by checking if the cloud infrastructure is architectured for right size
  • Reduce License costs by identifying redundant licenses deployment, or software subscriptions that are not in use / less used

All this can easily save and earn significant money to the portfolio company, increasing their runway - and chances of success.

That's why I recommend the investment funds to run a semi-annual tech-assessment of their portfolio - to increase the effectiveness of their capital deployment and improve odds of success and greater RoI.

When was the last time you validated the tech-stack of your portfolio companies ?