TechDD Myths busters #5

Tech DD Myth Busters # 6

Tech DD is only useful for IT Platform Companies

One investor manager I was speaking with, was quick to point out that they don’t need a Tech DD service, as “they do not invest in Tech Companies.

Often, when I speak to investment partners/managers whose fund is investing outside IT industry, they think they do not need a technology due diligence.

I find this as one of the most crucial myth around technology due diligence, especially in the new post-pandemic world.

During pandemic, almost all companies went into remote work, and the biggest challenge for their CTOs OR CIOs was to manage the ‘security and data sharing issues related to their workforce which is geographically spread across regions’.

Not only businesses have leveraged this opportunity to increase their efficiency in technology during this period, they have also learned that Every Business is a Technology Business in this New World Order.

Sectors like Retail have harnessed the benefits of technology via E-commerce, and Direct-To-Customer approach, Augmented Reality (AR) and AI-ML for high level analytics. In-person Entertainment Leaders have got their OTT platforms to fetch more eyes (and revenue) to the brand.

Manufacturing companies are using IoT for making manufacturing lean, agile and more powerful. Automobile Companies are improving user experience, reducing accidents by integrating technology with machines, and running robust analytics.

Today, virtually there is no business which does not use technology - may it be running the ERP at the core of their manufacturing business, CRM for their service business, Digital Advertising for their marketing business, Collaboration platform for their global teams, or AR/VR in their research department.

Technology has taken the central stage for every business, and thus every business that uses it, is prone to the risks that might arise with technology inefficiencies and gaps.

That’s why, whether your portfolio companies are making or selling a software platform or not, Every Business requires a Tech DD.

How well are your portfolio companies prepared for the technology risks and opportunities?