Software Due Diligence Evolves in Post-ZIRP Era as Investors Prioritize Profitability Over Growth

The software investment landscape has undergone a fundamental transformation as the era of Zero Interest Rate Policy (ZIRP) gives way to higher interest rates and tighter capital markets. Where software companies once prioritized aggressive growth and market share gains through easy borrowing, investors now demand clear paths to profitability, sound business models, and scalable operations that don't rely on continuous capital infusions. This shift represents a dramatic departure from the grow-at-all-costs mentality that characterized the previous market environment.

According to Faisal Siddiqui, Director at CohnReznick, today's investors are prioritizing software companies that can scale effectively, meet evolving compliance requirements, and maintain resilient technology infrastructure. The consulting firm provides comprehensive services to help technology companies navigate this new landscape through their technology practice at https://www.cohnreznick.com. Their approach leverages advanced technologies including artificial intelligence, machine learning, and cloud computing to help businesses optimize performance and maximize value.

CohnReznick's digital advisory services focus on helping technology companies craft strategic digital plans, select appropriate technologies, and build the right talent infrastructure to drive profitability. The firm evaluates existing technology infrastructure to identify inefficiencies and creates improvement roadmaps aimed at achieving leaner, more profitable operations at an accelerated pace. This comprehensive approach addresses the core challenges software companies face in attracting investment in the current market environment.

Artificial intelligence implementation represents a key area where CohnReznick provides specialized guidance, helping companies identify where AI can deliver tangible value through streamlined operations, enhanced productivity, and improved market share. The firm practices what it preaches by running internal AI initiatives to identify operational challenges and improve service delivery efficiency. This hands-on experience informs their client advisory work, ensuring practical, results-oriented recommendations.

Monetization challenges represent another critical area where software companies often struggle. CohnReznick addresses this through data analytics and automation services designed to help companies better monetize their offerings. Additionally, the firm provides robust cybersecurity solutions through its Digital Forensics Lab, which serves as the central hub for cyber incident response. This facility enables professionals to assess the full scope of cyber incidents, secure digital evidence, and establish protections against future threats using advanced forensic tools.

The Digital Forensics Lab works to quickly uncover the nature and extent of security incidents, whether involving data breaches, malware infections, or unauthorized access attempts. Beyond incident response, the lab provides security assessments to identify vulnerabilities, monitors networks for threats, and prepares companies for potential cyberattacks through simulated exercises and test plans. This comprehensive cybersecurity approach has become increasingly important as digital threats evolve in sophistication.

The transformation in software investment criteria reflects broader economic shifts that have made free-flowing capital more challenging to obtain. Investors now seek companies demonstrating controlled growth, streamlined operations, and sustainable profitability rather than those focused primarily on rapid expansion. This new reality requires software companies to fundamentally rethink their business strategies and operational approaches to remain competitive and attractive to potential investors in the post-ZIRP environment.