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Growth Rates

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031

How to Diligence the Risks of SaaS Scope Creep

By Hailey Messenger, Kerri Evans

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…
014

Discovering Repeatable Growth in your Diligence

By Jeff Merkle

Over the years, I have heard multiple M&A professionals say “we don’t underwrite hopes and dreams,” by which they mean new tactics proposed, but not tested, by Management (and their bankers). What is not discussed as often are the new tactics that have been tested…but that are destined to work just once. These tactics are what we call unrepeatable growth stimulants, UGS (or just,…
012

Commercial Due Diligence and Value Generation via Network Effects

By Jeff Merkle

Many attractive investments are predicated on network effects – these are businesses that connect users, buyers, and/or suppliers. Companies like Visa, eBay, and LinkedIn have famously enjoyed the benefits of network effects to accrue immense, highly durable value. Outside of software, businesses such as recruiting, retailing, media, health provider networks, and many others, enjoy network…
008

Indefensible (Competitive Position)

By Mark Stein

I’m fairly certain that just about every commercial diligence assignment conducted is going to include measurement of the asset's commercial strength relative to customer needs and expectations, and relative to perceptions of competitors and alternatives.
002

Problems to Avoid when Forecasting Product, Service, and Technology Adoption as Part of Diligence

By Mark Stein

An investment thesis often depends on adoption in one form or another (e.g., of a new product, business model, technology, etc.) so we thought it helpful to lay out “best and worst” practices for assessing adoption potential.
001

In Diligence, Competition Between Competing Budget Priorities can be more Important than Competitive Position

By Mark Stein

Many deals are attractive because the target company can turn heads and get customers excited about new technology and an enhanced value proposition.

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