When companies prepare for an exit or acquisition, the spotlight is usually on legal, HR, and financial due diligence. So it’s important not to miss another critical area: the software systems that underpin your business. Leaving this gap can introduce unnecessary risk and ultimately leave you blindsided in negotiations. That’s why when it comes to due diligence for software, sooner is better for buyers and sellers, says Boncode’s Chief Commercial Officer, Harm Garvelink.
Strengthening your position pre-acquisition
Pre-acquisition due diligence changes the dynamic for both sides of the deal. Instead of reacting to external findings, companies proactively assess their software landscape before entering formal negotiations. This internal process mirrors external due diligence but is conducted from the seller’s perspective. It identifies risks that could weaken negotiation leverage, giving leadership the opportunity to address them in advance.
The result is greater control for decision-makers. Sellers can decide whether to remediate issues, invest in improvements, or confidently justify their position based on broader strengths. More importantly, it replaces uncertainty with clarity, ensuring leadership enters negotiations fully informed.
Avoiding nasty surprises that impact valuation
One of the most tangible benefits of pre-acquisition due diligence is avoiding last-minute valuation adjustments. If an acquiring company uncovers technical issues, they may estimate the cost of fixing them and deduct that amount from the agreed price.
These discussions often happen under pressure, limiting room for negotiation. As Harm explains: “When you perform pre-acquisition due diligence on software, you avoid losing value due to unknown issues because you have all the facts upfront”. With this strategic insight, sellers can resolve issues ahead of time or factor them into expectations, preventing unexpected value erosion.
The benefits of software due diligence pre-acquisition
If software due diligence gets left behind, it can cause major problems further down the line. When concerns around scalability, maintainability, or vulnerabilities surface late in a deal, it leaves little time for the seller to respond strategically. That’s why performing software due diligence at the pre-acquisition stage is beneficial:
- It directly impacts valuation and deal confidence
- Issues found late weaken your negotiating position
- Fixing problems mid-deal is costly and disruptive
- Visibility upfront gives the seller control, not the buyer
- No surprises means stronger, faster negotiations.
Helping you prepare for the negotiating table
For business leaders, the message is clear: software risk should never be an afterthought. That’s why engaging an experienced consultancy like Boncode ensures pre-acquisition due diligence for software is thorough, objective, and actionable.
If you are planning an exit or acquisition, now is the time to act. Reach out to Boncode to ensure you have full visibility into your codebase before the process begins. Get in touch with our experienced consultants today.
