Drive Growth. Accelerate Innovation.
Mitigate Risks.

As a venture capital investor in emerging growth ventures, you can not afford to be wrong about software valuation or ignore the need to manage software intellectual property. Increasingly, open source software figures into this calculation. Many companies are now embracing open source because it’s cost-effective, efficient and reliable. Nonetheless, proprietary intellectual property can be inadvertently compromised by open source licensing obligations. Thus, it is crucial to identify the specific origins and licensing of open source within software assets.

When funding cutting-edge technology, you want strong future value and viable exit strategies to maximize portfolio company valuation and investment returns.

How does open source affect the value of software assets?

• Accelerates innovation and growth. Creating new products by reusing existing software code and adding innovative logic or architecture is becoming a standard practice. Open source is generally reliable and robust. Reusing open source code offers scalability and saves time and money during product development and testing, boosting profits and speeding time-to-market.

• Requires vigilant management. Software development management now lags behind development practices with respect to code origins, especially in start-ups. Well managed code reuse can contribute to good product design and performance and reduce support costs. Poorly managed code reuse can introduce hidden risks, delay time-to-market and undermine exit valuation—especially if open source is incorporated without regard for its license obligations. To make sure your investments outperform the market without compromising value, insist on automated management of code origin policies.

• Complicates due diligence assessments. During due diligence for mergers or IPO’s, unanticipated discovery of open source can devalue intellectual property by requiring distribution of proprietary secrets. When license issues arise, expensive mitigation can follow. To be prepared and protect confidential information, use technology to assess technology without revealing sensitive information.

Capture the highest strategic valuation during significant transactions.

Black Duck Software offers products and services that help technology companies identify and manage open source and third party code and their associated licenses. In preparation for and during M&A due diligence, Black Duck’s automated assessment platform provides a comprehensive bill of materials for software components and licenses along with recommendations for specific mitigation, if necessary. In addition, when choosing to implement ongoing code origin management and reuse policies, Black Duck solutions help promote best practices and mitigate risks. The Black Duck development platform brings together developers, lawyers, and business decision-makers within an automated environment that supports both accelerated innovation and legal transparency.

How can I find out more information?

• Read about Black Duck™ Transact, a hosted solution that provides an effective method for identifying open source and other third party code within your software code base. It is the most expedient, accurate and cost effective way to Know Your Code prior to a transaction or merger and acquisition.

• Discover how the Remote PC Access Service Provider - LogMeIn used Black Duck Transact to complete an in-depth code review for a corporate acquisition in less than one day, saving two-months of effort.

• Understand how to make all parties involved in technology M&A's aware of the importance of software component management by reading the whitepaper, The New Due Diligence Assessing the Protecting Your Software Asset Value in Mergers, Acquisitions and Financing Rounds.

• Learn a set of Best Practices that companies can use to avoid the risks and gain the benefits of this promising new approach to software development. Read the whitepaper entitled Best Practices for Managing Software Intellectual Property in an Open Source World.