In practice · 05 of 09
Forty-five days, two million lines, and one person spot-checking it at night.
In a software deal the software is the largest asset and the only one nobody reads.
Every other diligence stream has been industrialised
Financial diligence does not sample the ledger. Legal diligence does not read a selection of the contracts and extrapolate. Commercial diligence does not interview a subset of customers and call it coverage. Technology diligence still samples, because until recently reading the whole estate inside a deal window was not possible, and the practice has outlived the constraint that created it.
So a buyer sends an experienced person to look at a representative slice, and that person forms a competent judgement about the slice. The uncertainty about everything they did not open is then priced. It is priced as a discount, or as an escrow, or as an integration contingency, and it is rarely called by its name in the committee paper.
The four questions a deal actually turns on
- Owned against licensed. What the target genuinely owns, what it licenses, and what it has embedded under terms that become the acquirer's problem on completion. This is the question most likely to be answered confidently and wrongly.
- Key-person concentration, before the earn-out. Which parts of the asset depend on very few individuals, established from the record rather than from management's account of it. Retention packages are cheap when they are pointed at the right people and expensive when they are not.
- Entanglement with what stays behind. In a carve-out this is usually the largest hidden cost. Shared services, shared data, shared identity, shared scheduling. Transitional service agreements get written against management's understanding of the boundary, and the boundary is almost always messier.
- What the integration or separation actually costs. Not the number in the model, which is derived from the sample, but the number derived from the whole.
Working against a clock
Diligence has a hard window and no appetite for a discovery phase. The work has to produce a defensible answer inside exclusivity or it produces nothing of value. That shapes the method: an independent read of the whole estate first, then human attention spent on the specific things the read has flagged, rather than human attention spent deciding where to look.
The output also has a second life. A carve-out that closes becomes a separation programme, and a separation programme spends its first months rebuilding an understanding that the diligence already produced and then discarded. Keeping that record is close to free and removes a repeated cost.
On the sell side. The same work is worth doing before a process opens. A seller who can evidence ownership, concentration and entanglement removes the buyer's cheapest argument for a discount, which is uncertainty the seller could have resolved and did not.
Common questions
Is this a replacement for a technology due diligence provider?
It is a replacement for the sampling step inside one, and it works alongside the commercial and operational judgement that a diligence lead brings. The change is that the judgement is applied to the whole asset rather than to a slice of it chosen under time pressure.
Can it run without the target's cooperation?
It needs access to the code under the usual data room conditions, and it runs inside an environment the parties agree. It does not need the target's engineers to be available for interview first, which is what usually constrains the timetable, because it does not depend on anyone being able to describe a system from memory.
What about the target's data?
We work with the systems, the schemas and the pipelines, and deliberately not with record data. Everything runs inside an agreed boundary and nothing crosses it.
When this comes up. Comes up in exclusivity with a diligence window, an approaching exit, or an announced carve-out.
How it is delivered
A compressed Compass against the deal clock, with Vault producing the record that survives into the integration or the separation. Each module is a fixed deliverable behind a go or no-go gate, and the baseline earns the design. The full set of modules is here.
Related situations
- Legacy modernisationRetire the dead logic before the programme commits to carrying it.
- Delivery and change economicsThe cost of not understanding your own systems, made visible against your own records.
- AI enablement on a legacy estateEstablish which parts of the estate are safe to point an agent at, and why the rest are not.
Tell us what you are trying to land.
A short conversation about your situation and whether an independent accountable role is the right instrument. If it is not, we will say so. No deck follows automatically.