Trilogy Search Series Ep.5: Kevin Knoepp and Zach Seely – Ep.127

Today I’m joined by Kevin Knoepp and Zack Seely. Zach acquired a healthcare software company called FSI in late 2020 with technical diligence help from Kevin, a software due diligence advisor and Trilogy operating executive.

Our conversation doesn’t discuss the attractiveness of software as an investment, which it very much is, but rather on how to properly diligence software and operate and improve the business once acquired. We review common technical issues in software companies, how much technical debt is acceptable, Zach’s experience in diligence and operating improvements at FSI, and constructing a capable team to move a software business forward.

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Zach Seely on LinkedIn

Kevin Knoepp on LinkedIn


Martin Fowler – The Strangler Fig tree pattern


(4:00) – Zach’s experience at FSI at the acquisition point

(6:05) – Zach’s skills background & where Kevin fit into FSI

(7:34) – Kevin’s process for analyzing the technical side of software businesses

(10:50) – What are some red flags you’ll see in diligence?

(12:22) – What’s your perspective on Technical Debt?

(15:03) – How did you structure your deals or build teams to adjust for technical challenges you found?

(17:03) – How did you first set your priorities for what to fix with FSI?

(22:22) – What are some must fixes before you can complete an acquisition?

(23:52) – What sorts of gaps did you focus on in the first 18 months at FSI?

(26:54) – How did you evaluate the technical team before the acquisition?

(28:12) – What kinds of questions do you ask the technical teams to assess their abilities?

(31:46) – How do you evaluate and mitigate risk on a technical team?

(36:46) – What 2 to 3 changes did you make to the technical team right off the bat?

(41:59) – What sorts of processes have you set up to make work more transparent?

(45:11) – What are your thoughts on outsourcing vs. insourcing tasks or positions?

(49:19) – Is it common for software companies to offer some sort of budget for outsourcing services to their developers?

(51:27) – How do you evaluate if your team is utilizing capacity properly?

(54:34) – How did you evaluate FSI’s pricing strategy?

(57:15) – What common parts of a pricing strategy could use the most improvement in software businesses?

(59:19) – What strongly held belief have you changed your mind on?

(1:01:30) – What’s the best business you’ve ever seen?

Think Like an Owner Sponsors:

Live Oak Bank — Live Oak Bank is a seasoned SMB lender providing SBA and conventional financing for search funds, independent sponsors, private equity firms, and individuals looking to acquire lower middle-market companies. Live Oak has closed billions of dollars in SBA financing and is actively looking to help more small company investors across the country. If you are in the process of acquiring a company or thinking about starting a search, contact Lisa Forrest or Heather Endresen directly to start a conversation or go to

Hood & Strong, LLP — Hood & Strong is a CPA firm with a long history of working with search funds and private equity firms on diligence, assurance, tax services, and more. Hood & Strong is highly skilled in working with search funds, providing quality of earnings and due diligence services during the search, along with assurance and tax services post-acquisition. They offer a unique way to approach acquisition diligence and manage costs effectively. To learn more about how Hood & Strong can help your search, acquisition, and beyond, please email one of their partners Jerry Zhou at [email protected] 

Oberle Risk Strategies– Oberle is the leading specialty insurance brokerage catering to search funds and the broader ETA community, providing complimentary due diligence assessments of the target company’s commercial insurance and employee benefits programs. Over the past decade, August Felker and his team have engaged with hundreds of searchers to provide due diligence and ultimately place the most competitive insurance program at closing. Given August’s experience as a searcher himself, he and his team understand all that goes into buying a business and pride themselves on making the insurance portion of closing seamless and hassle-free.

If you are under LOI, please reach out to August to learn more about how Oberle can help with insurance due diligence at Or reach out to August directly at [email protected].

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