Don’t open yourself to problems: Open source technology and M&A due diligence

The collaborative nature of open source software development has shaped the way in which technologists create revolutionary tools. 

From the most agile blockchain, health care, and telecommunications startups, to the world’s largest banks, automotive and insurance companies, open source software is an omnipresent factor in virtually every technology-enabled organization.

However, the risks of using open source software should be recognized along with its advantages.

Particularly for technology companies seeking an exit event — be that through a merger, acquisition, initial public offering or other means — an understanding of potential open source software risks should be considered early in the development stage, lest the presence of an unanticipated or “infectious” license affect their future valuation.

In this commentary, we delve into open source software considerations and their potential impact in the context of a mergers and acquisitions deal.