GRAPH Papers® Commercial Diligence Best Practices

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Market Definition

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Topic: Market Definition
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051

The Importance of Product-Market Fit in Commercial Due Diligence

By Sophia Siddiqui

Globalization, digitalization, information access, and an increasingly discerning customer base have been contributing to a business environment that continues to build in competitive intensity year after year. To survive and thrive, companies must demonstrate meaningful growth that outperforms competitors or displaces incumbents. This growth can take the form of enhancement of existing…
050

CDD for Tech Implementation & Support Businesses – Spotting the Good, the Bad and the Ugly

By Phil Craig

With software multiples remaining stuck around record highs [in '22 and '23], many technology investors are pushing increasing dollars into the tech advisor and technology implementation/support partner market (often marketed as "Digital Transformation service providers"). These businesses are subject to similar market growth rates (minimum >10% p.a., many >20% p.a.), but relative to the…
046

How to Diligence the Risks of SaaS Scope Creep

By Hailey Messenger, Kerri Evans

GRAPH has diligenced many SaaS companies, and as we all witness there is a particular trend towards software companies seeking to build a “complete platform” stemming from an original best-in-breed point solution. In the quest to grow revenues, increase stickiness, drive value, and attract investment, companies are expanding their feature-sets. This scope-creep poses a very real risk of…
006

A Quick Follow-up on Market Definitions

By Mark Stein

In one of our earlier GRAPH Papers® articles, my partner James referenced how important it is to accurately define the market when it comes to market sizing requirements. Per that GRAPH Paper, “Having clear definitions that everyone on the deal team is aligned on is essential.” Beyond supporting market sizing, being clear on the market definition helps the team better understand the target…
005

Sizing Up Bad Market Definitions

By Mark Stein

Reflecting on 20 years of investing, one investment professional recently remarked to us, “When I think about what we’ve gotten wrong in the past, the worst times have been when we believed we had a bigger market size than we really did. There’s just nothing you can do...the company just runs out of room for growth.”

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