We want to maximize our enterprise value for an exit in three years, but we are debating whether to spend resources coding a proprietary AI application or simply building highly customized prompts in standard platforms. How will a sophisticated buyer value these two approaches during due diligence?

Question

Tyler Smith · Accepted Answer

Sophisticated buyers do not buy technology for the sake of technology; they buy predictable, transferable cash flows. They are highly skeptical of custom-coded AI applications built by small companies, because custom code represents a massive maintenance liability and technical debt.

If you build a custom AI app, a buyer during due diligence will immediately ask who maintains the code, what happens when the underlying models update, and how much it costs to keep it running. Unless you are a software company selling a tech product, custom code often decreases your valuation because of the perceived operational risk.

Instead, a buyer will highly value deeply integrated, standardized workflows that utilize mainstream AI platforms. If you use standard, reliable tools but have documented, highly proprietary prompts and automated sequences, you have built a valuable business asset.

The value lies in your process, your clean data, and your team's ability to execute. This is far easier to transfer to a new owner than a fragile, custom-coded software package that requires a team of expensive engineers to maintain.

Focus your resources on building robust, well-documented automated workflows using established, low-code platforms. This minimizes your ongoing maintenance costs, keeps your capitalization of earnings high, and presents a clean, low-risk operational structure that a buyer can easily step into and run.