Stress-testing the assumptions behind valuation, defensibility, and exit outcomes.
If an acquirer's diligence team spent 30 days stress-testing your defensibility narrative, what would they find? Would your valuation assumptions hold — or would you be negotiating concessions?
Most investors don't know. Most portfolio companies can't say with confidence. And by the time the question gets asked in a live process, it's too late to change the answer.
In 21 days, we identify where defensibility assumptions are strong, where they are fragile, where value is being created but not captured, and where targeted IP strategy could materially reduce risk or increase optionality.
Most technology companies are valued as if their defensibility, IP posture, and technical differentiation are proven. In reality, those assumptions are rarely stress-tested.
Traditional diligence focuses on financials, legal ownership, and operational metrics. It often misses whether product, technology, and IP strategy actually support the valuation story — until late-stage diligence, integration, or exit.
That gap creates:
"The pattern is consistent: defensibility assumptions go untested until an external event forces scrutiny. By then, remediation is reactive, leverage shifts to the other side, and value quietly erodes."
The Exit-Grade IP & Defensibility Assessment evaluates whether the assumptions embedded in valuation and exit narratives are supported by evidence across product, technology, and IP posture.
In 21 days, we identify:
A structured, three-phase process delivered in 21 calendar days.
We identify the core assumptions underlying defensibility, differentiation, and exit narratives — and test whether they are supported by product, technology, and IP reality.
What gets examined:
Output: Valuation Dependency Map
We map where value is being created across systems, workflows, data, and product evolution — and where that value is not being captured, protected, or reinforced.
This includes:
Output: IP Surface Area & Leakage Map
We model how defensibility evolves over time if nothing changes — and how targeted IP and product alignment could materially alter that trajectory.
This analysis is directional, not prescriptive. The goal is to show where the company is headed and what levers exist to change course.
Output: Defensibility Trajectory Brief
All findings are framed in valuation language for board and investor consumption:
Board-ready PDF with key findings, prioritized risks, and strategic implications.
Visual mapping of which defensibility assumptions are supported, fragile, or unverified.
Where value is being created, where it's escaping, and where capture opportunities exist.
How easily competitors, acquirers, or former employees could replicate core advantages.
Directional view of how defensibility strengthens or erodes under current vs. targeted action.
No legal opinions. No implementation. No scope creep. Deliverables are designed to travel forward — usable in future diligence, shareable with acquirers, and referenceable in board discussions.
A redacted example showing what a board-ready output actually looks like.
This is one of the core deliverables from the Exit-Grade IP & Defensibility Assessment. It makes explicit which defensibility assumptions are doing the most work in the valuation narrative.
The example below is anonymized but representative of the structure and depth clients receive.
View printable sample →Redacted example — structure and depth representative, content anonymized. This illustrates how valuation assumptions are stress-tested against product, technology, and IP evidence.
To make explicit which defensibility assumptions embedded in valuation are doing the most work — and whether they are supported by evidence, dependent on undocumented knowledge, or exposed to replication and erosion risk.
| Assumption | Where It Appears | Why It Matters |
|---|---|---|
| Product differentiation is difficult to replicate | Management deck, CIM | Justifies revenue multiple premium |
| Data advantage compounds over time | Exit narrative | Supports long-term defensibility claims |
| Customer switching costs are high | Board materials | Assumes pricing power and retention |
| Technical know-how is institutionalized | Diligence Q&A | Reduces key-person risk |
| IP posture supports exclusivity | Legal diligence | Limits competitive entry |
| Assumption | Evidence Status | Notes |
|---|---|---|
| Product differentiation | Partially supported | Core workflow is differentiated; adjacent features are replicable |
| Data advantage | Fragile | Data aggregation exists but lacks formal protection or exclusivity |
| Switching costs | Assumed, not proven | No contractual lock-in; switching cost is operational, not structural |
| Institutionalized know-how | High risk | Critical logic resides with 1–2 individuals |
| IP posture | Incomplete | Multiple latent IP assets unrecognized and undocumented |
| Assumption | Risk Level | Primary Risk Driver |
|---|---|---|
| Product differentiation | Medium | Competitors could copy non-core workflows |
| Data advantage | High | No trade secret controls; no contractual data exclusivity |
| Switching costs | Medium | Switching friction declines as market matures |
| Institutional knowledge | High | Key-person dependency |
| IP posture | Medium–High | Value created but not captured |
Key insight: The valuation narrative assumes defensibility is structural. In reality, it is currently behavioral and organizational.
This does not imply the valuation is wrong. It implies the valuation is conditional.
Clients use this map to:
This assessment is typically engaged at moments when assumptions become consequential:
"Law firms protect what is already known. This assessment reveals what is assumed — but not yet proven."
*Timeline assumes timely access to requested materials and stakeholders. Delays extend delivery proportionally.
A brief pre-engagement intake (30–45 minutes) covering:
If scope exceeds a single assessment, this is flagged before engagement.
Traditional diligence focuses on historical compliance and documentation. This assessment stress-tests whether product, technology, and IP actually support the valuation narrative — before buyers or investors ask the hard questions.
No. This assessment complements legal counsel by identifying where legal action is most needed and providing the evidence to prioritize it.
No. We identify and prioritize opportunities; execution is handled by counsel.
Typically a small number of structured interviews and system walkthroughs over the 21-day engagement.
All engagements are conducted under NDA, with clear data handling boundaries defined upfront.
Clients use the deliverables to reduce diligence risk, strengthen defensibility narratives, align product and IP strategy, and protect valuation before scrutiny begins. Optional follow-on support is available by request.
If you're evaluating a specific portfolio company, schedule a 15-minute call to confirm fit, timing, and scope.
