Investors eyeing your business? We’ll help you clear the red flags

Published on July 3, 2018 by Tim Misson

Posted in Business

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You’ve established your business, built a viable product or service and you’re ready to take it to the next level. But investors are looking for the red flags in your business – and if they find them, you may not get the valuation you expect.

By its nature, innovation is quick, and technology – even when it’s the foundation of the business – can come together in a haphazard fashion. Skip forward a couple of years and no doubt you’ll have built a brilliant software product or system, but any potential investors will want to look back in time to get an idea of exactly what went into it.

Investors aren’t looking at the quality of your code, so much as who owns it. And if you’ve used contractors, or outsourced part of the development, they might discover it isn’t you. Unless you’ve paperwork specifically stating otherwise, any contractors or third-party devs may have retained ownership of their contributions. Worse, you might find that those contributions contain legacy code, re-purposed from earlier projects and getting long in the tooth.

As you grow, think of the impact of not having complete ownership of a core technology or flagship product. Consider the potential downsides to old, re-hashed code that can’t scale without being rewritten. Because investors will – and if there’s code to buy or rewrite, the cost will come off the value of your business.

Digging in deep

Of course, this is where we can help. We offer Red Flags – an audit on software systems or products that’s specifically designed to identify the kind of issues that could trip you up as you seek investment. We’ll examine the essential health of your software, uncovering issues such as confused or conflicted IP ownership, legacy code or technologies, or scalability issues.

We’ll advise you on any risks, and identify elements that need to be addressed or changed before you go to market. Because if you’re selling a business that’s reliant on its technology, you need to be sure it’s yours to sell.

Photo by Hubert Mousseigne on Unsplash