Series A Due Diligence

Due Diligence Has Changed

A decade ago, Series A due diligence focused on three things: the team, the market, and the financials. Investors met the founders, assessed the TAM, reviewed the unit economics, and made a decision that was largely qualitative. The intangible assets — technology, customer relationships, IP, brand — were assumed to exist but rarely examined in detail.

That era is over. Institutional VCs now conduct structured intangible asset due diligence as a standard part of Series A evaluation. They do this because the evidence is clear: the quality and composition of intangible assets are the strongest predictors of long-term value creation.

★ Key Takeaway

Series A investors increasingly assess intangible assets with the same rigour they apply to financials. Founders who prepare for this assessment — rather than being surprised by it — control the narrative and achieve stronger outcomes.

The Five Intangible Asset Pillars of Series A Diligence

5 intangible asset categories assessed

60-90 days typical diligence timeline

3-5x valuation impact of strong intangible assets

1. Technology Defensibility

The first question every technical due diligence team asks is not "does it work?" but "can it be replicated?" Technology that solves a problem but can be rebuilt by a well-funded competitor in 6 months does not create lasting value. Technology that embeds proprietary algorithms, accumulated data advantages, or architectural decisions that are difficult to reverse-engineer creates a moat.

Technology Assessment Criteria

Factor	Strong Signal	Weak Signal
Architecture	Modular, scalable, well-documented	Monolithic, fragile, tribal knowledge
Proprietary elements	Core algorithms, unique data pipelines	Wrapper around open-source tools
Technical debt	Managed, tracked, prioritised	Unmeasured, accumulating, unacknowledged
Testing	Comprehensive automated test suite	Manual testing, no CI/CD
Transferability	Any competent engineer can contribute	Only original developers can modify

✔ Example

A healthtech startup passed product diligence easily — the platform worked well and users loved it. But technical diligence revealed that the core diagnostic algorithm was embedded in a single Python notebook maintained by one data scientist, with no documentation, no version control, and no test coverage. The investor reduced their valuation offer by 30% and required a 6-month technical remediation plan as a condition of investment.

2. Customer Capital Quality

Investors at Series A assess not just how many customers you have, but the quality of those relationships. Customer capital quality is measured through retention, expansion, diversification, and switching costs.

Key metrics investors examine include net dollar retention (target above 110%), logo churn rate (target below 5% annually), customer concentration (no single customer above 15% of revenue), and contract structure (annual contracts preferred over monthly).

ℹ Note

Customer capital is the intangible asset most directly correlated with valuation multiples. A 10-percentage-point improvement in NRR typically translates to a 2-3x improvement in revenue multiple. Investors know this — and they verify the numbers.

3. Intellectual Property Strength

IP due diligence at Series A examines whether the company's innovations are legally protected and whether those protections are defensible. This includes patent filings and grants, trade secret documentation and protection protocols, trademark registrations, copyright ownership, and open-source licence compliance.

The last point catches many startups off guard. If your product incorporates GPL-licensed code, the IP implications can be significant. Investors want to see a clean open-source audit before they commit capital.

4. Brand and Market Position

At Series A, brand assessment focuses on organic traction rather than paid metrics. Investors look at domain authority and organic search rankings, brand mention volume and sentiment, community engagement (newsletter subscribers, social following, forum activity), and earned media coverage.

A startup with strong organic metrics has built genuine brand equity — an intangible asset that reduces customer acquisition cost over time and creates a competitive moat that paid advertising cannot replicate.

5. Team and Organizational Capital

Human capital assessment at Series A goes beyond the founders. Investors evaluate the depth of the engineering team, the domain expertise of key hires, retention patterns, and the organizational structures that enable the team to execute without key-person dependency.

Organizational capital — documented processes, decision-making frameworks, hiring playbooks, onboarding systems — signals operational maturity. A startup that can onboard a new engineer and have them contributing within 2 weeks has stronger organizational capital than one where onboarding takes 3 months.

How Investors Score Intangible Assets

Most institutional VCs use some form of scoring framework during due diligence. While the specific criteria vary, the structure is consistent.

Typical Intangible Asset Scorecard

Asset Category	Weight	Score Range	Key Metrics
Technology	25-30%	1-5	Defensibility, scalability, documentation
Customer Capital	25-30%	1-5	NRR, churn, concentration, contract terms
IP	15-20%	1-5	Patent coverage, trade secrets, compliance
Brand	10-15%	1-5	Organic traction, domain authority, community
Team	15-20%	1-5	Depth, retention, key-person risk, culture

A weighted score above 3.5 typically signals a strong intangible asset portfolio. Below 2.5 suggests material risks that will affect valuation.

Prepared Founders

Present asset inventory proactively
Provide metrics before being asked
Acknowledge weaknesses with remediation plans
Control the diligence narrative

Unprepared Founders

React to diligence requests
Scramble to produce evidence
Surprises discovered by investor team
Lose negotiating leverage

Preparing for Intangible Asset Due Diligence

The Pre-Series A Checklist

Conduct a self-assessment — Use the Opagio Intangibles Questionnaire to evaluate your intangible asset portfolio before investors do
Document your technology — Architecture diagrams, API documentation, test coverage reports, and a technical debt register
Prepare customer metrics — Cohort analysis showing retention, expansion, and churn trends over at least 12 months
Audit your IP — Compile a complete inventory of patents (filed and granted), trademarks, trade secrets, and open-source dependencies
Map your team — Organisation chart with key responsibilities, key-person risk assessment, and succession plans for critical roles

★ Key Takeaway

The best due diligence preparation is building genuinely strong intangible assets. But presentation matters — a well-documented intangible asset portfolio accelerates diligence, builds investor confidence, and commands premium valuations.

Resources

Assess your intangible assets — The Opagio Intangibles Questionnaire evaluates your startup across all five due diligence categories
Value specific assets — The Intangible Asset Valuator supports cost approach, RFR, and MPEEM calculations
Understand PPA — Our guide to purchase price allocation explains how acquirers value intangible assets

About the Author

Ivan Gowan is the Founder and CEO of Opagio. With 25 years in financial technology — including building and scaling IG Group's technology platforms — he has been on both sides of the due diligence table and brings practical experience of how intangible assets are assessed in investment decisions. Meet the team.

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