5 ms·
Would you really show your source code before purchase?
by aliswe 4y ago
Would you really show your source code before purchase?
- Moto7451 4y agoThat’s precisely how acquisitions at my current and past company worked. Everyone signs NDAs, there’s a fee paid by the purchaser for the time should they decline the deal, and the audit commences. I’ve been asked to do the evaluation a few times and it’s pretty straightforward. Even if you think the code is of poor quality, it may still make sense to complete the purchase because of the business case.
- dmak 4y agoNot necessarily. It depends on the company acquiring. I've seen M&As focus solely on the relationships (ex, customers), so the tech DD was just checkboxes without deep dives.
- Moto7451 4y agoNot necessarily… what? This is my actual professional experience. I’m sure people just buy things without any due diligence somewhere but I have never seen it. In one case my judgement was that the customer list was all that there was of value. They opted to not buy that company.
- dmak 4y agoI didn't say they skipped DD.
- shaburn 4y agoWere these companies more public and independently well capitalized or cash fires with little bargaining leverage for asset sales?
- Moto7451 4y agoA mix of everything. The deals are always worth millions of dollars.
- manuelabeledo 4y agoIt’s a pretty standard procedure, so yeah. It’s worth mentioning that Musk waived his right to do so.
- mayankkaizen 4y agoI once read about an acquisition attempt by Google which eventually failed because Google found codebase less than impressive. So I guess this is normal to review codebase before a buyout.
- alistairSH 4y agoYes, that’s normal. At least when a PE from is buying. NDAs signed, automated scanners run, consultants sent in, etc.
- hodgesrm 4y agoInspecting the source code is a condition of all deals I've been involved with. Most sensible people want to see what they buying, unless they are under pressure to close fast due to competition. It's a lot like buying a house.
- dastbe 4y agoyes. would you buy a company without reviewing and inspecting its assets? remember you have to tell us if you’re elon musk.
- caminante 4y agoGetting/giving access to the actual code/backend (especially as a competitor!) is a heavily negotiated diligence request. The seller can simply refuse without even giving a reason. ITT: People are throwing around the phrase "audit" liberally. Audit will have a defined (and likely limited) scope and is typically more about compliance, e.g., Do you have the correct number of Microsoft Office licenses per accounting records?