Expert Highlights Hidden Risks Impacting Value Creation in PE-Backed Tech Deals
As private equity investment in technology and healthcare IT accelerates into the fall of 2025, Aaron Hale, Shareholder and Technology Industry Leader at LBMC, has issued a call for investors and executives to widen their lens on value creation. Hale, who works closely with private equity-backed technology and software organizations nationwide, says that while financial diligence remains foundational, it is no longer sufficient to safeguard enterprise value.
“These aren’t just box-check alarms — they’re the fault lines where deals can crack,” said Hale. “If we want to lead, our lens must be wider — regulatory, operational, economic, and ultimately, cultural. That’s how we safeguard value and deliver returns that last.”
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Seven Things Private Equity Leaders Should Be Watching in the Tech Space — But Aren’t Hearing Enough About
1. Product–Finance Misalignment
High-growth companies often scale engineering faster than finance. Outdated reporting and manual processes are leading to distorted valuations, revenue recognition issues, and covenant risks. You don’t scale with spreadsheets.
2. Cyber Resilience Over Mere Readiness
Investors ask for cyber policies, but few test recovery speed. In healthcare and SaaS models, the cost of a breach is existential — not just financial.
3. Culture and Leadership Continuity Under Pressure
Post-close talent drain and founder fatigue are turning integration into a top-line risk. Culture isn’t soft — it’s structural.
4. Healthcare Regulatory Backlash
State and federal scrutiny of PE ownership in healthcare, including California’s SB 351, is shifting from noise to structural headwinds. Early structure planning is now imperative.
5. Operational Value Over Leverage
With capital costs rising, PE firms are leaning on operational velocity and AI-driven execution to drive returns. Financial engineering alone no longer delivers.
6. Hidden Economic Ripple Risks
Trade policy and geopolitical shocks are creating second-order impacts across supply chains, cost structures, and growth forecasts. Traditional models aren’t stress-testing these ripple effects.
7. AI Risk & Disclosure Gaps
Generative AI is infiltrating business models, but disclosures remain vague. SEC scrutiny is growing, and incomplete risk reporting could derail diligence or exits.
Why It Matters Now
Middle-market CEOs and private equity firms — particularly those in healthcare IT, SaaS, and tech-enabled services—face an investment environment that demands sharper diligence and integrated expertise. Hale emphasizes that firms able to align product, people, and platforms with financial narratives will be best positioned to weather uncertainty and capture outsized returns.
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