When looking to invest in a technology asset, there are some fundamental questions that will help you gain a better picture of the technology landscape, the business plan, and most importantly, the potential for growth. In the current competitive landscape, it’s also important to get to know management and make them feel at ease, which can be helped by asking the right questions.
I reached out to our consultant community and asked them, if they were approached by a private equity firm, what would they expect to be asked? They told me:
● What are your current top three issues?
● How has the leadership embraced digital transformation / the threat of disruptive tech?
● What is the product / service roadmap and is there an accompanying technology roadmap?
● How robust, scalable, intelligent and differentiated is your technology?
● How smart are your people and partners?
● How aligned are you to your CEO's vision and the business overall, do you get asked what to do, or told?
● Do you represent your business on non-tech topics?
● How aligned is the technology strategy / roadmap to the business strategy?
I also asked them, what would a CTO want to get across to a potential private equity investor? This is what they said:
● Technology strategy and future product plans: To demonstrate strong technology choices, future plans and alternative technologies. Evidencing the cost vs. return and consistency with business strategy. How the strategy fully enables the business’ vision and objectives.
● People: An overview of the technology teams, location and size. For example, who are the key personnel and what is the relationship between cost and productivity. This includes any third party suppliers that support the technology teams. They would also want to demonstrate the capability to firstly manifest a technology vision and strategy and secondly execute on that strategy.
● Product and project management: What is their product management strategy and roadmap? This also includes customer / partner commitments, upgrades and consistency with business strategy. Highlighting project management, the tools used and plans and status of next major releases.
● Architecture: Showcasing the company’s scalability and competitive advantages. They would want to demonstrate it is modern and that they understand the cost of re-architecting.
● Development tools and processes: And how these improve and promote productivity.
Endava regularly supports these early conversations through expert calls and attending management presentations. Please get in touch if you’d like to find out more.