File: /home/investoo.co.uk/public_html/news/technical-due-diligence.html
<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Strict//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-strict.dtd">
<html xmlns="http://www.w3.org/1999/xhtml" lang="en" xml:lang="en">
<head>
<meta http-equiv="Content-Type" content="text/html; charset=utf-8"/>
<title>Technical Due Diligence | UK Business Angels Association</title>
<link rel="canonical" href="https://investoo.co.uk/news/technical-due-diligence" />
<meta http-equiv="Content-Type" content="text/html; charset=utf-8"/>
<link rel="shortcut icon" href="../sites/all/themes/bbaa_theme/favicon.ico" type="image/x-icon"/>
<meta name="keywords" content="BBAA,British Business Angels Association,angel,angel investing,early stage,entrepreneurial finance,enterprise investment scheme,business angel"/>
<meta name="description" content="British Business Angels Association is the national trade association dedicated to promoting angel investing and supporting early stage investment in the UK."/>
<link type="text/css" rel="stylesheet" media="all" href="http://www.bbaa.org.uk/sites/default/files/css/css_f0f96c9c6e0bfcca5a25aafbfd357602.css"/>
<link type="text/css" rel="stylesheet" media="all" href="../sites/all/themes/fusion/fusion_core/css/grid12-960-F.css"/>
<!--[if IE 8]>
<link type="text/css" rel="stylesheet" media="all" href="/sites/all/themes/fusion/fusion_core/css/ie8-fixes.css?F" />
<![endif]-->
<!--[if IE 7]>
<link type="text/css" rel="stylesheet" media="all" href="/sites/all/themes/fusion/fusion_core/css/ie7-fixes.css?F" />
<![endif]-->
<!--[if lte IE 6]>
<link type="text/css" rel="stylesheet" media="all" href="/sites/all/themes/fusion/fusion_core/css/ie6-fixes.css?F"/>
<link type="text/css" rel="stylesheet" media="all" href="/sites/all/themes/bbaa_theme/css/ie6-fixes.css?F"/>
<![endif]-->
<script type="text/javascript" src="../sites/default/files/js/js_9d7e4cf95517961c0aec8e0b6111919a.js"></script>
<script type="text/javascript">
<!--//--><![CDATA[//><!--
jQuery.extend(Drupal.settings, {"basePath":"\/","googleanalytics":{"trackOutgoing":1,"trackMailto":1,"trackDownload":1,"trackDownloadExtensions":"7z|aac|arc|arj|asf|asx|avi|bin|csv|doc|exe|flv|gif|gz|gzip|hqx|jar|jpe?g|js|mp(2|3|4|e?g)|mov(ie)?|msi|msp|pdf|phps|png|ppt|qtm?|ra(m|r)?|sea|sit|tar|tgz|torrent|txt|wav|wma|wmv|wpd|xls|xml|z|zip"}});
//--><!]]>
</script>
</head>
<body id="pid-news-technical-due-diligence" class="not-front not-logged-in page-node node-type-news no-sidebars full-node layout-main-last sidebars-split font-family-myriad font-size-13 grid-type-960 grid-width-12">
<div id="page" class="page">
<div id="page-inner" class="page-inner">
<div id="skip">
<a href="#main-content-area">Skip to Main Content Area</a>
</div>
<!-- header-top row: width = grid_width -->
<!-- header-group row: width = grid_width -->
<div id="header-group-wrapper" class="header-group-wrapper full-width">
<div id="header-group" class="header-group row grid12-12">
<div id="header-group-inner" class="header-group-inner inner clearfix">
<div id="block-block-23" class="block block-block odd first grid12-12">
<div class="inner clearfix">
<div class="content clearfix">
<div>
<a href="/" rel="nofollow"><img alt="" src="../sites/default/files/media/image/site/ukbaa-logo-280.jpg" style="width:280px; height:85px"/></a></div>
</div>
</div><!-- /block-inner -->
</div><!-- /block -->
<div id="block-menu-primary-links" class="block block-menu even last grid12-12 fusion-inline-menu">
<div class="inner clearfix">
<div class="content clearfix">
<ul class="menu"><li class="leaf first"><a href="/" title="Welcome">Home</a></li>
<li class="expanded"><a href="../about" title="About Us">About</a><ul class="menu"><li class="leaf first"><a href="../about/about-bbaa" title="Our Mission">About UK Business Angels Association</a></li>
<li class="leaf"><a href="../about/board" title="Our People">Board of Directors</a></li>
<li class="leaf"><a href="../about/committees" title="Committees">Committees</a></li>
<li class="leaf last"><a href="../about/how-to-use-this-site" title="How to use this site">How to use this site</a></li>
</ul></li>
<li class="expanded"><a href="../membership" title="Membership">Be a member</a><ul class="menu"><li class="leaf first"><a href="../membership/angel-networks" title="Angel Networks">Angel Networks</a></li>
<li class="leaf"><a href="../membership/individual-investors-syndicates" title="Individual Investor/Syndicate Membership">Individual Investors & Syndicates</a></li>
<li class="leaf"><a href="../membership/early-stage-vcs" title="Early Stage VC's">Early Stage VCs</a></li>
<li class="leaf last"><a href="../membership/professional-service-providers" title="Professional Service Providers">Professional Service Providers</a></li>
</ul></li>
<li class="expanded"><a href="../member-directory" title="Member Directory">Members & Services </a><ul class="menu"><li class="leaf first"><a href="../member/directory_type-1" title="">Angel Networks</a></li>
<li class="leaf"><a href="../member/directory_type-2" title="">Venture Capital Funds</a></li>
<li class="leaf last"><a href="../member/directory_type-3" title="">Professional Service Providers</a></li>
</ul></li>
<li class="expanded"><a href="../investors" title="Investors">Investors</a><ul class="menu"><li class="leaf first"><a href="../investors/introduction-angel-investing" title="Introduction to Angel Investing">Introduction to Angel Investing</a></li>
<li class="leaf"><a href="../investors/key-considerations" title="Key Considerations for Investors">Key Considerations</a></li>
<li class="leaf"><a href="../investors/ukbaa-membership" title="">UKBAA Membership</a></li>
<li class="leaf"><a href="../investors/find-angel-network" title="Find an Angel Network">Find an Angel Network</a></li>
<li class="leaf"><a href="../investors/high-net-worth-individuals-and-self-certified-sophisticated-investors" title="High Net Worth Individuals and Self-Certified Sophisticated Investors">High Net Worth Individuals and Self-Certified Sophisticated Investors</a></li>
<li class="leaf last"><a href="../investors/angel-cofund-0" title="The Angel CoFund">The Angel CoFund</a></li>
</ul></li>
<li class="expanded"><a href="../entrepreneurs" title="Entrepreneurs">Entrepreneurs</a><ul class="menu"><li class="leaf first"><a href="../entrepreneurs/introduction-angel-finance" title="Introduction to Angel Finance">Introduction to Angel Finance</a></li>
<li class="leaf"><a href="../entrepreneurs/funding-process" title="The Angel Funding Process">The Funding Process</a></li>
<li class="leaf"><a href="../entrepreneurs/find-angel-network-vc-professional-service-provider" title="Find an Angel Network / VC / Professional Service Provider">Find an Angel Network / VC / Professional Service Provider</a></li>
<li class="leaf last"><a href="../entrepreneurs/high-net-worth-individuals-and-self-certified-sophisticated-investors" title="High Net Worth Individuals and Self-Certified Sophisticated Investors">High Net Worth Individuals and Self-Certified Sophisticated Investors</a></li>
</ul></li>
<li class="leaf"><a href="../sponsors" title="Sponsors">Sponsors</a></li>
<li class="collapsed"><a href="../news" title="">News</a></li>
<li class="collapsed"><a href="../events" title="Events">Events</a></li>
<li class="expanded"><a href="../research-policy" title="Research & Policy">Research & Policy</a><ul class="menu"><li class="leaf first"><a href="../research-policy/market-research" title="">Market Research</a></li>
<li class="leaf"><a href="../research-policy/guides-and-tools" title="">Guides and Tools</a></li>
<li class="leaf last"><a href="../research-policy/policy-and-regulatory-updates" title="">Policy and Regulatory Updates</a></li>
</ul></li>
<li class="leaf last"><a href="../be-an-angel" title="">Be An Angel</a></li>
</ul> </div>
</div><!-- /block-inner -->
</div><!-- /block -->
</div><!-- /header-group-inner -->
</div><!-- /header-group -->
</div><!-- /header-group-wrapper -->
<!-- preface-top row: width = grid_width -->
<!-- main row: width = grid_width -->
<div id="main-wrapper" class="main-wrapper full-width">
<div id="main" class="main row grid12-12">
<div id="main-inner" class="main-inner inner clearfix">
<!-- main group: width = grid_width - sidebar_first_width -->
<div id="main-group" class="main-group row nested grid12-12">
<div id="main-group-inner" class="main-group-inner inner">
<div id="main-content" class="main-content row nested">
<div id="main-content-inner" class="main-content-inner inner">
<!-- content group: width = grid_width - (sidebar_first_width + sidebar_last_width) -->
<div id="content-group" class="content-group row nested grid12-8">
<div id="content-group-inner" class="content-group-inner inner">
<div id="content-region" class="content-region row nested">
<div id="content-region-inner" class="content-region-inner inner">
<a name="main-content-area" id="main-content-area"></a>
<div id="content-inner" class="content-inner block">
<div id="content-inner-inner" class="content-inner-inner inner">
<h1 class="title">Technical Due Diligence</h1>
<div id="content-content" class="content-content">
<div id="node-413" class="node odd full-node node-type-news">
<div class="inner">
<div class="content clearfix">
<div class="field field-type-civicrm-cck-contact field-field-member">
<div class="field-items">
<div class="field-item odd">
<div class="civicrm_cck"><a href="../member/PeraTechnologyLtd">Pera Technology Ltd</a></div> </div>
</div>
</div>
<div class="field field-type-date field-field-date">
<div class="field-items">
<div class="field-item odd">
<span class="date-display-single">19 January 2012</span> </div>
</div>
</div>
<p>
Tap the words ‘due diligence’ into Google and you will be met with a plethora of definitions, with a range of prefixes, including financial, commercial, human, market and technical.</p>
<p>
Investopedia.com (2012) defines due diligence as “An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to a sale”. Difficult to argue with the objectives of this definition however, it begs the question ‘how do you audit a start-up business that has only been trading for 3 months?’</p>
<p>
Genet, a respected early stage investment specialist sympathises with the Angels dilemma, suggesting “it’s virtually impossible for Angels to know how to go in and verify that there is a market for a technology in anything more than a superficial sense”. Grahame (2007), CEO of Linc the Business Angel Association for Scotland said “a huge amount of judgement is based around the entrepreneur or the management team… clearly the technology has to check out… and then 95% of it is gut feel, do we want to back these people?” In truth, both statements are underpinned by their detailed understanding of the structural issues of Angel groups, their inability to pay for such due diligence (due to the non-profit status of Angel groups – it’s the individuals who invest and make the money not the Angel group), the breadth of knowledge required and the groups reliance on the good will of individual group members.</p>
<p>
So, what do we need to audit/investigate a potential investment opportunity? I would suggest three things, experience, information and process. In recognising these three points BBAA will be assembling a range of experience in their technical committee (meeting in February 2012) with a view to defining the appropriate processes for the various aspects of due diligence. Pera will be focusing on the technical due diligence of new technologies/products and the commercial opportunity they present. Pera would welcome your thoughts, experiences or challenges around these two areas and look forward to hearing from you.</p>
</div>
<div class="terms">
<ul class="links inline"><li class="taxonomy_term_29 first last"><a href="https://ukbaa.org.uk/" rel="tag" title="">UKBAA Main Site</a></li>
</ul> </div>
</div><!-- /inner -->
</div><!-- /node-413 -->
</div><!-- /content-content -->
</div><!-- /content-inner-inner -->
</div><!-- /content-inner -->
</div><!-- /content-region-inner -->
</div><!-- /content-region -->
</div><!-- /content-group-inner -->
</div><!-- /content-group -->
<div id="sidebar-last" class="sidebar-last row nested grid12-4">
<div id="sidebar-last-inner" class="sidebar-last-inner inner clearfix">
<div id="block-views-news-block_4" class="block block-views odd first last block-aqua grid12-4">
<div class="inner clearfix">
<h2 class="title block-title"><a href="../news" class="block-title-link">News</a></h2>
<div class="content clearfix">
<div class="view view-news view-id-news view-display-id-block_4 view-dom-id-1">
<div class="view-content">
<div class="views-row views-row-1 views-row-odd views-row-first">
<div class="views-field-title">
<span class="field-content"><a href="../news/new-seed-enterprise-investment-scheme-and-tsb-smart-grants">New Seed Enterprise Investment scheme and TSB SMART grants</a></span>
</div>
<div class="views-field-field-date-value">
<span class="field-content"><span class="date-display-single">16 August 2012</span></span>
</div>
</div>
<div class="views-row views-row-2 views-row-even">
<div class="views-field-title">
<span class="field-content"><a href="../news/hmrc-delivering-cap-income-tax-relief-technical-consultation">HMRC - Delivering a cap on income tax relief: a technical consultation</a></span>
</div>
<div class="views-field-field-date-value">
<span class="field-content"><span class="date-display-single">24 July 2012</span></span>
</div>
</div>
<div class="views-row views-row-3 views-row-odd views-row-last">
<div class="views-field-title">
<span class="field-content"><a href="../news/job-vacancy-manager-uk-business-angels-association-uk-trade-body-angel-and-early-stage-investin">Job Vacancy - Manager of the UK Business Angels Association, UK Trade Body for Angel and early stage investing (Full-time position)</a></span>
</div>
<div class="views-field-field-date-value">
<span class="field-content"><span class="date-display-single">18 July 2012</span></span>
</div>
</div>
</div>
<div class="more-link">
<a href="../news">
more news ... </a>
</div>
</div> </div>
</div><!-- /block-inner -->
</div><!-- /block -->
</div><!-- /sidebar-last-inner -->
</div><!-- /sidebar-last -->
</div><!-- /main-content-inner -->
</div><!-- /main-content -->
</div><!-- /main-group-inner -->
</div><!-- /main-group -->
</div><!-- /main-inner -->
</div><!-- /main -->
</div><!-- /main-wrapper -->
<!-- postscript-bottom row: width = grid_width -->
<!-- footer row: width = grid_width -->
<div id="footer-wrapper" class="footer-wrapper full-width">
<div id="footer" class="footer row grid12-12">
<div id="footer-inner" class="footer-inner inner clearfix">
<div id="block-block-9" class="block block-block odd first grid12-12">
<div class="inner clearfix">
<div class="content clearfix">
<p class="footer-grey" style="line-height:0.5em">Sponsored by:</p>
<table border="0" cellpadding="0" cellspacing="0">
<tbody>
<tr>
<td colspan="2" style="vertical-align:middle">
<p style="line-height:36px"><a href="http://www.bba.org.uk/" target="_blank" rel="nofollow"><img alt="" src="../sites/default/files/media/image/content/sponsors/logo-bba.jpg" style="width:95px; height:72px; vertical-align:middle"/></a> <img alt="" src="../sites/default/files/media/image/content/sponsors/logo-bgf.jpg" style="width:109px; height:65px; vertical-align:middle"/> <a href="http://www.capitalforenterprise.gov.uk/" target="_blank" rel="nofollow"><img alt="" src="../sites/default/files/media/image/content/sponsors/logo-cfe.jpg" style="width:109px; height:64px; vertical-align:middle"/></a> <a href="http://www.lloydstsbbusiness.com/" target="_blank" rel="nofollow"><img alt="Lloyds TSB Commercial" src="../sites/default/files/media/image/content/sponsors/logo-lloyds.jpg" style="width:216px; height:26px; vertical-align:middle"/></a> <a href="http://www.nesta.org.uk/" target="_blank" rel="nofollow"><img alt="" src="../sites/default/files/media/nesta_logo_rgb_300px.jpg" style="width:114px; height:26px"/></a> <a href="http://www.smith.williamson.co.uk/" target="_blank" rel="nofollow"><img alt="Smith & Williamson" src="../sites/default/files/media/image/content/sponsors/logo-smithwilliamson.jpg" style="width:201px; height:16px; vertical-align:middle"/></a> </p>
</td>
</tr>
<tr>
<td style="vertical-align:bottom">
<p><img alt="" src="../sites/default/files/media/image/site/ukbaa_colour_wings_50.png" style="width:50px; height:50px; float:left"/>The UK Business Angels Association is registered in England and Wales (Registration number 02127064).<br/>
Pinners Hall, 105-108 Old Broad Street London, EC2N 1EX • 0207 628 7222 / info@ukbusinessangelsassociation.org.uk <br/>
<a href="../terms" rel="nofollow">Terms</a> © UK Business Angels Association</p>
</td>
<td style="vertical-align:bottom">
<a href="http://www.twitter.com/bbaangels" target="_blank" rel="nofollow"><img alt="footer-twitter.jpg" src="../sites/default/files/media/image/site/footer-twitter.jpg"/></a> <a href="http://www.linkedin.com/company/british-business-angels-association" target="_blank" rel="nofollow"><img alt="footer-linkedin.jpg" src="../sites/default/files/media/image/site/footer-linkedin.jpg"/></a></td>
</tr>
</tbody>
</table>
<p> </p>
</div>
</div><!-- /block-inner -->
</div><!-- /block -->
<div id="block-block-10" class="block block-block even last grid12-12 fusion-right-content">
<div class="inner clearfix">
<div class="content clearfix">
<p><a href="http://www.surgedesign.co.uk/" target="_blank" rel="nofollow">Design by surge design</a> - <a href="http://www.pecansolutions.com/" target="_blank">Website by Pecan Solutions</a></p>
</div>
</div><!-- /block-inner -->
</div><!-- /block -->
</div><!-- /footer-inner -->
</div><!-- /footer -->
</div><!-- /footer-wrapper -->
<!-- footer-message row: width = grid_width -->
<div id="footer-message-wrapper" class="footer-message-wrapper full-width">
<div id="footer-message" class="footer-message row grid12-12">
<div id="footer-message-inner" class="footer-message-inner inner clearfix">
</div><!-- /footer-message-inner -->
</div><!-- /footer-message -->
</div><!-- /footer-message-wrapper -->
</div><!-- /page-inner -->
</div><!-- /page -->
<script type="text/javascript">
<!--//--><![CDATA[//><!--
//--><!]]>
</script>
</body>
</html>