Difficult Tech Questions COPY

Question 1

What is part of a tech DD?

Answer 1

Architecture: structure, scalability, integrations

Code Quality: maintainability, technical debt

Infrastructure/DevOps: cloud setup, CI/CD, monitoring

Security: IAM, vulnerabilities, compliance (ISO, SOC2, GDPR)

Data: models, pipelines, governance, privacy

Engineering Team: skills, processes, productivity

Roadmap: feasibility, risks, tech vision

IP & Legal: ownership, open-source licenses

Costs: cloud spend, efficiency, CapEx/OpEx

Reliability: testing, automation, uptime, incident history

Question 2

Long ARR Bridge

Answer 2

ARRnew = ARRₛₜₐᵣₜ + New + Expansion – Contraction – Churn

Question 3

What type of churn exist?

Answer 3

Logo Churn ARR (lost customers)

Partial Churn ARR (partial cancellations)

Question 4

What type of contraction exists?

Answer 4

Downsell ARR (reduced seats/usage)

Price Decrease ARR (discounting)

FX headwinds

Question 5

What is Snowball effect?

Answer 5

More users → more value → more users (network effect).

Question 6

What is network effect?

Answer 6

A dynamic where a product becomes more valuable as more users join.

Question 7

Low Marginal Cost in Software

Answer 7

Leads to high scalability, strong operating leverage, and eventually high EBITDA margins.

Question 8

Land and Expand Strategy

Answer 8

A go-to-market model where companies:

1. Land a small initial deal (low friction, easy entry).
2. Expand through upsells, cross-sells, more seats, more modules.
   Leads to high Net Dollar Retention (NDR) and strong customer lifetime value.

Question 9

Whats unique about IT Services

Answer 9

1. People-Based, Not Product-Based // rev comes from labor, not software
2. Stickiness from Long-Term Contracts
   - long customer relationships
   - recurring support contracts
   - mission-critical systems, making churn low
3. Fragmented, PE-Driven Roll-Up Sector
   - PE firms acquire regional MSPs
   - expand service offerings (cyber, cloud)
   - consolidate back-office
4. Lower “tech risk” but high customer concentration

Question 10

TAM vs SAM vs SOM (Definitions)

Answer 10

TAM (Total Addressable Market):
The total demand for a product if it achieved 100% market share. The “full universe.”

SAM (Serviceable Addressable Market):
The portion of TAM that the company’s products can actually serve based on its capabilities and physical/geographic reach.

SOM (Serviceable Obtainable Market):
The portion of SAM the company can realistically capture in the near term (market share target).

Question 11

Net Dollar Retention

Answer 11

NDR= (Starting ARR+Expansion−Contraction−Churn) / Starting ARR

Question 12

Why NDR Matters to Investors

Answer 12

strong product-market fit

land-and-expand success

low churn

high customer LTV

high predictability of revenue

Question 13

Houlihan Deals

Answer 13

Mait form 3i to acquisition by DBAG (Pending)
MAIT is an end-to-end digitalisation services partner for the manufacturing industry // ERP and PLM

HIG Capital acquisition of Timetoact (2025)
Germany, is a leading IT services provider specialising in cloud platforms and digital solutions

Mubdala acquisition of Babel (2025)
Madrid-based IT and digital transformation services provide

Question 14

Market trends in Tech

Answer 14

The global semiconductor industry is booming: in 2024 revenue grew ~18% over 2023, and in 2025 it’s forecast to break ~ US$700–800 billion
-Growth driven by AI infra deman

• Contraction, Layoffs & Market-wide Caution
• digital sovereignty — who owns the infrastructure, who controls data, and who builds AI supply chains.

Question 15

European Market Development

Answer 15

big swing back toward AI / ML / deep tech / climate-tech / defence-tech in Europe

31% of all funding in European tech went to AI / machine learning companies

Question 16

Current Big German Tech Transactions

Answer 16

Siemens → Dotmatics (Apr/Jul 2025) — Siemens acquired Dotmatics (a life-sciences R&D software provider) for US $5.1 billion

Acquisition of UBI by Tencent nvested €1.16 billion for a minority stake in Vantage Studios

Acquisition of EA by Saudi US $55 billion by PIF

Question 17

HL Stock

Answer 17

179 USD

Question 18

Gross Revenue Retention (GRR)

Answer 18

(Starting MRR – Churned MRR)/Starting MRR
​

Question 19

Net Revenue Retention (NRR / NDR)

Answer 19

NRR = (Starting MRR – Churned MRR + Expansion MRR​)/Starting MRR