Conventional technical diligence
Is this software
well built?
Architecture, code quality, security, scalability, technical debt, and the engineering organization.
Investment diligence for software transactions
Know what you’re
actually buying.
We test how hard a software business is to recreate, so you can underwrite what makes it defensible.
~2 weeksBuilt for the deal timeline
Controlled replicationSenior engineering-led
IC-ready conclusionsEvidence for underwriting
Fixed scopeOne investment question
Well built isn’t the
same as defensible.
Development history is no longer a reliable proxy for product defensibility. The investment question needs a different test.
Is this software
The SoftDiligence question
Is this software
difficult to reproduce?
If somebody tried, what would it actually take?
How we test itSoftDiligence works alongside conventional technical diligence to test the economic defensibility of the product being acquired.
We attempt to
reproduce the product.
A controlled build sprint turns assumptions about replicability into evidence about time, talent, cost, and uncertainty.
Start with the target
Review the demo, architecture, documentation, and the defensibility claims being underwritten.
Run a controlled replication sprint
A senior engineering team attempts reproduction against a defined scope, measuring effort and identifying barriers.
Find the irreducible advantage
Separate what can be recreated from the data, integrations, workflow, and distribution that resist replication.
Defensibility is not binary
One product.
Three different barriers.
Reproducing the interface, operating the product, and winning the customer are different challenges. We assess each separately.
Can the visible product experience be reproduced?
We test the functionality and workflows a customer can see. A convincing demonstration can be much easier to recreate than a production business.
Interface & workflowsCore functionalityDemonstrable replication
Can it operate securely, reliably, and at scale?
We examine what it takes to move from a comparable demo to a dependable product, including architecture, integrations, reliability, and operational complexity.
Security & reliabilityScale & integrationsOperational requirements
Can it compete for the customer’s dollar?
We separate technical replicability from the commercial barriers created by proprietary data, embedded workflows, switching costs, and distribution.
Proprietary dataWorkflow & switching costsDistribution
A product may take months to reproduce technically, but years to reproduce commercially. Those are different investment conclusions.
Two weeks.
One investment question.
A focused diligence sprint designed around live transactions and minimal management disruption.
- Days 1-2
Frame the moat
Review the product, architecture, and management’s defensibility claims.
- Days 3-8
Test replication
Run the controlled build sprint and engineering analysis.
- Days 9-10
Find barriers
Assess demonstration, production, and commercial parity.
- Days 11-12
Quantify effort
Estimate time, talent, cost, and uncertainty.
- Days 13-14
Read out
Deliver IC-ready findings and discuss the investment implications.
Works alongside your deal team
QoE / Commercial DD / Technical DD / Legal & cyber
From engineering to economics
Evidence that changes
the investment decision.
An IC-ready defensibility scorecard connects replication findings to valuation, the downside case, and negotiation.
Illustrative target
ExampleCo
- Demonstration parity
- 3-5 weeks
- Production parity
- 6-12 months
- Commercial parity
- 24+ months
- Estimated replication cost
- $1.2-2.0m
- Proprietary data moat
- Strong
- Technical moat
- Moderate
- Workflow moat
- Low
- Distribution moat
- Strong
The investment conclusion
The application layer is substantially more replicable than management positioning implies, but proprietary data and distribution create meaningful commercial defensibility.
ValuationDownside caseIC memoNegotiation
The objective is evidence that changes underwriting. Each engagement distinguishes what the sprint demonstrates from what remains uncertain.
Different capital.
The same software risk.
How exposed are enterprise value and recovery value to technological commoditization?
Understand which barriers protect the business if the software itself becomes cheaper and faster to recreate.
Is the technological moat embedded in valuation real?
Test the product advantage behind the investment case and identify where defensibility actually resides.
What happens to the investment case as development costs fall?
Assess competitive entry risk and distinguish replicable features from barriers that can sustain growth.
Are you buying capabilities that would be cheaper to build?
Compare replication effort with the assets, integrations, and commercial position that an acquisition brings.
Before the sprint.
Does this replace conventional technical diligence?
No. Conventional technical diligence examines how well the software is built. SoftDiligence works alongside it to test how difficult the product and business would be to recreate.
What access does an engagement need?
We frame the sprint around the available demo, architecture, documentation, and public information. The engagement scope establishes the access needed to test the investment question.
What does the two-week sprint deliver?
A defensibility scorecard, measured replication findings, estimates of time and cost, and an investor readout. Findings distinguish demonstration, production, and commercial parity.
Does a successful replication mean there is no moat?
No. A replicable application may still have strong proprietary data, integration, workflow, or distribution barriers. We separate those sources of defensibility so the investment conclusion reflects the whole business.
Your next software deal.
Underwrite the difference.
Know what can be recreated.
Know what cannot.
Start with the investment question
Discuss your next deal.
Choose a time for a 30-minute conversation about your software transaction and the diligence questions that matter.
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