CDD for Tech Implementation & Support Businesses – Spotting the Good, the Bad and the Ugly
Given the massive growth in digitisation, automation and the software markets, investors are pushing ever-increasing amounts in the tech advisor and technology implementation/support partner market. These businesses are subject to the same market growth rates (minimum >10% p.a., many >20% p.a.), but relative to the underlying software businesses they benefit from lower entry multiples…
How to Diligence the Risks of SaaS Scope Creep
GRAPH has diligenced many SaaS companies, and as we all witness there is a particular trend towards software companies seeking to build a “complete platform” stemming from an original best-in-breed point solution. In the quest to grow revenues, increase stickiness, drive value, and attract investment, companies are expanding their feature-sets. This scope-creep poses a very real risk of…
Credit in the time of COVID
Any statement on the level of disruption that 2020 has served up risks being an understatement. In addition to reconsidering personal lives and routines, many investors have been forced to rethink world views on risk and downside – a subject we’ve been spending immense time on over these past 6 months. While GRAPH prides itself on thinking creatively about value gen opportunities for new…
Winning in the Swing States – Commercial Due Diligence Lessons from Political Strategy
2024 will see national elections in both the US and the UK.* In both cases, the election will be won and lost in a handful of key marginal seats (or “swing states,” for US readers) - constituencies where the winning margin at the last election was less than 5% of the vote.
CDD Plan of Attack: Risk of Overstatement of Digital Disruption Signals (and Opportunity)
The risk of ‘digital disruption’ is pertinent to almost every industry today. Naturally, acquirers look for signals that a target company will be able to brace the oncoming winds of change and enhance its products and services to meet the demands of an increasingly connected and digital world.
Available Market Size
Why Large Markets Can Sometimes Feel Very Small (and why Addressable Market is insufficient) We’ve written before about the need to clearly define markets to inform accurate sizing. But even with the clearest possible definition, one other piece of analysis is critical, and is often overlooked – quantifying what we like to call the Available Market Size.
Sizing Up Bad Market Definitions
Reflecting on 20 years of investing, one investment professional recently remarked to us, “When I think about what we’ve gotten wrong in the past, the worst times have been when we believed we had a bigger market size than we really did. There’s just nothing you can do...the company just runs out of room for growth.”