investment fund management tips

6 Key Terminologies Fund Managers must Know

You got a promising pitch of a Tech Startup, with a huge potential, to solve a really big problem with technology... The next thing you are wondering about?

Is the technology they are backing on is Capable? Will this scale to serve the Millions of Potential users? What if this crashes? What if customer’s data is not protected?

Yes, I get the fear you carry. I see this every-day while my team engages with funds to do Tech DD of the Tech Platforms they are interested in putting their money, their brand-value and reputation.

Even if you are in a rush and don’t have the required time and budget to perform detailed Tech DD, there are certain things you should not skip.

Here’s a quick guide;

  • Tech Stack: You must check which tech Stack is chosen to build the platform. Whether the tech stack is robust, scalable and has less learning curve.
  • Cloud Strategy: If the platform is going to be hosted on Cloud then what is the hosting Strategy? Is it going to be single-cloud OR multi-cloud hosting?
  • Data Protection and Security: Check your industry and applicable regulations, compliances for Data Protection & Security. Check if the tech team has made sufficient considerations and provisions in the platform to address these.
  • Tech Team Structure: Tech alone can’t grow the business. It needs equally capable team. So check current team structure and hierarchy.
  • Incident Management: Check if the team has thought about handling incidents and issues reported by customers. How are they helping customers with resolution.
  • IPR Protection: This is critical and applicable if the platform has engaged other 3rd party teams, vendors, systems and information is being shared. Check if the relevant agreement exists with applicable clauses and IPR is not being shared with other 3rd parties.

How do you ensure that your portfolio companies are prepared for the technology risks?