Every deal has a dominant pressure.
Sometimes it’s the numbers. Sometimes it’s deal speed. Sometimes it’s the promise of a new market or a technology you don’t want a competitor to snap up.
And when a target is highly profitable—especially in sectors like AI where small teams can generate big margins—it’s easy to lean heavily on the commercial lens. “It’s already working; let’s not tinker too much.” It’s a very human, very understandable instinct.
But the danger with any instinct is that if it becomes the only way you look at the business, you start missing things. Blind spots appear. And those blind spots have a quiet habit of becoming tomorrow’s value leakage.
Where Single-Lens Thinking Breaks Down
In technology, fragility rarely shouts.
It tends to whisper.
You don’t know documentation is too light until the team doubles and nothing is written down.
You don’t know governance is too loose until a security requirement lands, and nobody even knows who “owns” it.
You don’t know how much risk sits inside tribal knowledge until the one person who understands a critical workflow suddenly takes a holiday, gets poached, or burns out.
A 2024 McKinsey analysis estimated that companies with thin documentation lose 20–30% productivity when scaling or integrating.¹
Not because anyone did anything wrong—but because the organisation grew faster than its foundations.
Add to that Bain’s finding that 40% of post-acquisition friction stems from process gaps and undocumented knowledge², and the picture becomes clearer:
even brilliantly profitable tech companies can quietly accumulate operational risk under the surface.
The Lenses That Matter (and Why Balanced Ones Win)
The best investors I work with don’t ignore the commercial lens—they simply refuse to let it dominate the entire frame. They rotate through several lenses to get a sharper picture of what they’re really buying.
Here are the lenses that most often surface during TechDD discussions:
1. The Commercial Lens
Margins, efficiency, cash generation.
Strength: clarity.
Risk: overconfidence in the status quo.
2. The Growth Lens
Pace, new features, new markets.
Strength: momentum.
Risk: disorder if the engine isn’t built for scale.
3. The Governance Lens
Documentation, controls, leadership structure, risk management.
Strength: resilience and repeatability.
Risk: applied too late, it becomes expensive to retrofit.
4. The Value Creation Lens
Operational uplift, multiples, exit story.
Strength: long-term visibility.
Risk: underestimates the drag caused by weak foundations.
5. The Platform Lens
Integration potential across the portfolio.
Strength: synergy and leverage.
Risk: assuming a target can “plug in” before it’s ready.
Each of these tells you something different.
None tells you enough on its own.
Harvard Business Review found that firms investing in early governance outperform peers by 15% EBITDA within a typical hold period³. Not because they slow things down—because they remove friction before it compounds.
Why People Shape the Lens They Prefer
Investing isn’t just technical—it’s intensely psychological.
Different instinctive styles lean toward different lenses.
In Kolbe terms:
- High Quick Starts (which many investors and founders are) instinctively push for momentum. They see opportunity first.
- High Follow Through profiles look for structure and clarity.
- High Fact Finders want risk surfaced and quantified.
- High Implementors want to see how things function in practice.
There’s no “right” instinct.
The issue arises when a team only listens to the loudest one.
This is why TechDD and post-deal governance work so well: they create a shared operating picture that removes guesswork and reduces reliance on any one person’s intuition—even when that intuition has historically served them well.
Thin Documentation: A Signal Hiding in Plain Sight
One of the strongest signals in young tech companies—especially profitable ones—is how little is actually written down.
Thin documentation is rarely malicious. It’s usually the by-product of:
- founders doing everything themselves
- a developer team that “just gets on with it”
- years of shipping fast
- the absence of internal leadership roles
- a product built for internal use rather than external scrutiny
But the consequence is the same:
knowledge becomes a liability instead of an asset.
The irony?
It often takes governance structures to reveal issues that even deep TechDD couldn’t fully surface. Governance isn’t a box-ticking exercise—it’s the lens that shows what wasn’t visible before.
For Investors: Questions That Sharpen Decision-Making
Here are the questions that consistently separate the most successful investment committees from the merely competent ones:
1. Which lens are we unconsciously over-using in this deal?
Commercial? Growth? Governance? Something else?
2. What would break first if the company doubled in headcount or customer volume?
And what would that cost us?
3. What’s the smallest governance investment we can make now that prevents the biggest headaches later?
(Almost always documentation, security leadership, or basic process clarity.)
4. What risk are we consciously accepting by doing nothing this year?
And how aligned are we on that risk?
5. How does this business look to a buyer in year four?
Not the buyer we hope for—the buyer that exists in the real world.
These questions don’t slow deals down.
They speed value creation up.
Governance Isn’t the Enemy of Growth—It’s the Multiplying Factor
Strong margins, small teams, and internal-only products can create a sense of safety—almost a belief that the business can continue exactly as it has. But history and data show that the moment growth accelerates or compliance tightens, gaps appear.
Early governance doesn’t drain value.
It protects it, extends it, and multiplies it.
In a world where technology moves quickly, and exits come with real scrutiny, governance isn’t a cost line—it’s the quiet engine of compounding advantage.
