I sit on the board of advisors for a company that is considering acquiring a small blockchain company. I am looking for IT due diligence best practices to identify and confirm the technology.
I would start with the two question below to assess if they are a "proper" blockchain startup you like to get engaged with:
1. Does their customer massively benefit from blockchain being used as a solution?
There are a lot of companies out there using blockchain because it gives them a reason to do ICOs or because BC is "cool" not because using the tech actually makes it easier to solve their problem. There are a lot of very good reasons to not use blockchain (e.g. cost & resource consumption) for 95 %+ of use cases.
2. Do they use the right blockchain technology stack for their problem? Have they considered using existing platforms & frameworks? If not, why not?
I have seen a few business that "just wanted their own chain" and hence developed a new chain where they could have perfectly used Etherum or one of the Hyperledger Frameworks, wasting man-years of development time on basics instead of building features their customers want.
Once you clear these two to your satisfaction and have established you work with a serious and professional team I suggest you get help from an experienced business blockchain consultant to advise you on how to optimally structure the details of your due diligence work. If you have none in your current network let me know, sure I can help.
I‘m heavily involved in blockchain tokenomics -working begins the scenes with a wide variety of projects from dApps, privacy, colored, and collectible/gaming NFTs. Wouldn’t mind taking a quick look for free to help out. Do they have a github or technical white paper?
Can share a M&A process checklist for a strategic overview. Thanking you in advance, Gary
I don't feel comfortable doing that myself; however, I worked with someone in an investment technology company who I would recommend. We were responsible for financial technology in several blockchain-related areas. He is a security, networking, and IT expert, has a CISSP certification, and was the CTO of another technology company. He's one of the sharpest people I know, and I trust no one else when it comes to the hard questions in technology or business. I don't know whether he would be interested or have the time for this, but I can connect you if you want.
I do due diligence work. Blockchain is also an area I have experience with, plus cybersecurity in general. You can contact me at email@example.com if you'd like.
We do this. I have led teams that do this sort of thing for many years, and have done the cyber security components of DD for many early stage companies - for this space you certainly need the cyber-security aspects. Get in touch with me directly at firstname.lastname@example.org
Most things don't need a blockchain. database works for most for what they want to use a blockchain for. be careful of this.
If you have not already please consider a cybersecurity audit. That is the big weakness given it is a high value target, that it is software and most organizations literally avoid most cybersecurity best practices. Including PAM and IAM. Ironic how blockchain is supposed to be so safe but hacking and stealing the data not so much.