Custom software: building a proprietary asset that can be valued from day one

Every year, hundreds of European organisations invest in custom software development without ever making it a defensible asset. The reason is not technical: it is a positioning problem. Software designed only to function — without documentation, without formalised intellectual property, without metrics — is software that a third party cannot validate. And an asset that a third party cannot validate cannot be valued.

Design decisions that determine valuation

The valuation of custom software in an M&A context rests on three dimensions: intellectual property (who legally owns the code?), documentation (can a third party understand and take over the project?), and data sovereignty (can the data processed be transferred?). These three dimensions are largely decided during initial design.

Intellectual property: who owns the code?

The first question asked by any acquirer is the simplest: who owns this software? The answers are often ambiguous. Code developed by freelancers without rights assignment clauses, open source components under licences incompatible with commercial disposal, algorithms developed by employees whose contracts do not provide for explicit assignment. Each of these situations creates a direct legal risk that translates into a discount or a blocking point.

Documentation: the condition of transferability

• Functional documentation: what does the software do, for whom, in what contexts?
• Technical documentation: architecture, data flows, dependencies, APIs
• Operational documentation: runbooks, deployment procedures, incident management
• Automated tests: minimum 70% coverage as a robustness signal for an acquirer

CIFSO 5000 Certification applied to custom software

CIFSO 5000 Certification evaluates custom software assets across 5 dimensions: Capital (intellectual property, rights, registrations), Integrity (architecture, documentation, technical debt), Finance (recurrence metrics, TCO, client ROI), Security (penetration testing, GDPR compliance, sovereignty) and Organisation (transferability, key person dependencies, governance). It produces an independent and defensible framework that transforms a technical asset into an investable asset.

Build certifiable from day one

The Aegryn approach to custom software integrates future valuation requirements from the design phase. Contractor contracts with rights assignment clauses, open source licence audits, continuous technical documentation and documented cloud-native architecture: every build decision is made with the horizon of a certification or transaction in mind.