Four people looking under hood of car cartoon like. Revelry blog post on AI and tech due diligence

AI and Limiting Risks Associated with Shiny Objects

Whether Considering Emerging Tech or Legacy Systems, Technical Due Diligence Is Key

AI is seemingly everywhere – dominating conversations, conferences, and headlines. And it makes sense, because artificial intelligence is changing industries, economies, and societies worldwide. It’s awesome, and its potential is mindblowing.

However, as is the case with most emerging and rapidly advancing tech, AI also brings with it risks: cybersecurity risks; risks related to data hallucinations and algorithmic bias; and risks that come when you get distracted by the shininess of new tech and technical due diligence becomes an afterthought. (Yes, we’re talking to you, private equity and holdco friends.)  

The Value of Technical Due Diligence

Technical due diligence is critical because, whether you’re considering a new investment or guiding an existing one, you need to understand the lay of the land – what’s under the hood, so to speak. Technical due diligence gives you the information you need to negotiate or operate from a position of strength; adjust plans to manage challenges; and turn around and exit with success. It helps you:

  • Reduce risk by identifying unknown problems that could cost you;
  • Preserve value by assessing actual value;
  • Determine full investment potential by understanding product strategy and resource needs and opportunities.  

What to Expect from a Due Diligence Assessment

A technical due diligence assessment should include a deep dive on all components and documentation related to your target’s or investment’s software product, platform, or technology; here’s what we include as a part of our assessments. 

Just as important as a comprehensive approach and clear process is having a partner with the experience, expertise, and resources needed to ensure the right questions are asked and no stone is left unturned. A thorough assessment of all things infrastructure, architecture, product strategy and roadmap, security, compliance, and technical leadership demands a multifaceted team of business, product, and engineering experts. These professionals must not only be knowledgeable and skilled, but also insanely curious and somewhat fearless. 

A Pre-Deal or Post-Investment “Must”

Whether pre-deal or post-investment (AI focused or otherwise), technical due diligence is an important step that PE and holdco leaders shouldn’t skip. If you’d like to learn more about the process – or Revelry’s specific approach to technical due diligence assessments – please reach out.  

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