The Diligence Killer Hiding in the Database Private equity deals don’t die because of strategy. They die in diligence. You can show a stellar growth curve, disciplined underwriting, and a strong sales funnel,but if the buyer’s CTO opens the hood and finds a monolith built on thousands of undocumented stored procedures, valuation takes an immediate haircut.
Why? Because buyers don’t just buy earnings; they buy the ability to scale. A stored-procedure-heavy monolith is the opposite of scalable: it’s opaque, talent-hostile, brittle under load, and expensive to modernize. In diligence, that translates directly into lower multiples, longer timelines, and fewer bidders who stay in the game.
Individuals There must be KPIs for individual developers. In fact, I distinctly remember thinking the same thing when pressed by a VP who wanted to squeeze every ounce of productivity out of my team. My manager’s request was to have something like individual baseball stats (RBIs, Runs, Hits, Bases on Balls, Strikeouts). If we could measure individuals and eliminate the low performers, the rest would form a strong team. He was talking about Moneyball before the movie was released.
2025-09-02
15 min read
When you prepare to sell a business, bankers talk about revenue growth, margins, and customer stickiness. But buyers have another silent multiplier in mind: your technology.
In diligence, they don’t just ask, “Does it work?” They ask:
“Can it scale without millions in re-platforming?” “Will our engineers revolt when they open the repo?” “Does compliance add risk or reduce it?” The answers drive valuation. Well-designed systems don’t win you the deal alone but they can shave months off diligence, keep bidders in the process longer, and protect 1–2x on your multiple. That’s why exit-ready architecture matters.