In the past, M&A due diligence meant lawyers digging through piles of papers to evaluate the activities of a seller. Although there’s still plenty of work to be done during the diligence process modern technology allows lawyers and other dealmakers to conduct their analysis at speed and efficiency levels that were simply unachievable until today.
Tech Due Diligence
In the current climate of cybersecurity and GDPR regulations performing due diligence on technology is vital to the success of a company. In order to conduct a proper tech due diligence it is crucial to analyze the security of a software firm and ensure that they are compliant. Also, it involves analyzing the potential of the company’s intellectual portfolio and identifying any potential infringement issues.
In the process of acquiring it is crucial to know the financial structure of a business and ensure that all parties share the same expectations. A thorough due diligence exercise can reveal concerns such as overstated net losses, unreported tax liabilities, non-filing risk, taxes on payroll, and sales and use tax.
During the due diligence process, it’s vital to establish a clear strategy for gathering and sharing all relevant information. A set of playbooks, which can be used throughout the process by teams, assists in keeping everyone on the right track and ensures consistency. Loopio’s collaborative workspace and team workspace features are ideal for this, helping teams to stay focused on their tasks and not get distracted by other tasks.