One question I keep getting asked is why would a non-business acquirer be interested in the tech?

There are a couple of ways to look at it:

The first is from the current state: how brittle is it and how capable are those maintaining it. If a major part of it fails at 2am will it take down the entire business? If it does go down, how long before things come back up? Lastly, how often do things like this happen?

The second comes from longevity and viability of the business. If a company you are looking at is dependent on a particular product, it’d be really nice to know that the dependent product will no longer be maintained by the vendor (either because the vendor is phasing it out or went out of business themselves).

The common thread to both aspects is the new unanticipated sunk cost to remediate the situation once the deal closes. If you are the business owner, you may choose to use your version (if you happen to be buying a similar line of business and you have your own tooling), but the private equity firms and VCs don’t have that option.

Does the tech matter in this case?

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