When someone is about to put serious money into a software company — an investment, an acquisition — they’re buying an asset they can’t see. The deck says “scalable, AI-powered platform.” Technical due diligence is how you find out whether that’s true, or whether you’re buying a demo held together with duct tape and one irreplaceable engineer.
What it actually covers
Good technical due diligence goes well beyond “is the code neat.” It assesses:
- Codebase health & technical debt — how maintainable it is, and how much hidden work is owed before it can grow.
- Architecture & scalability — will it handle the growth the deal assumes, or does it hit a wall right after close?
- Security & data handling — exposure, compliance (GDPR and friends), and the kind of risk that becomes a headline post-acquisition.
- Infrastructure & cost — what it costs to run, and whether that scales sanely with usage.
- Team & key-person risk — does the knowledge live in the team, or in one person’s head? What happens if they leave after the earn-out?
- AI & IP claims — is the “AI” real and owned, or a thin wrapper on someone else’s API dressed up for the pitch?
What a good report looks like
The output that matters isn’t a 40-page technical dump the deal team can’t read. It’s a translation. Every finding mapped to the language of the deal:
- Red — a real risk to price or a reason to walk.
- Amber — a fixable issue to price in or address post-close.
- Green — solid, no concern.
Plus a clear read on the people risk, which spreadsheets miss and which sinks more acquisitions than bad code does. The best diligence ends with a call where your deal team can ask “so what does this mean for the terms?” and get a straight answer.
Why founders should run it on themselves first
Here’s the move most founders miss: reverse diligence. Before investors or acquirers put your stack under the microscope, put it there yourself. It lets you:
- Fix the obvious red flags while they’re cheap and private.
- Prepare honest, confident answers instead of being caught flat-footed in the room.
- Avoid the value-destroying surprise that surfaces at the worst possible moment and hands the other side leverage.
A raise or an exit is precisely when technical surprises cost the most. Spending a little to find them first is one of the highest-return things a founder can do before a deal.
Why independent matters
The people who built the system are the last people who can objectively assess its risk — not because they’re dishonest, but because they’re too close to it and too invested in the outcome. An independent technical read, from someone who has delivered and audited hundreds of systems across industries, is exactly what protects the cheque on the investor side and prepares the founder on the other.
Whether you’re evaluating a target or getting your own house in order before a raise, my technical due diligence service gives you findings written for investors, not just engineers — risk mapped to the deal, with a call for your team. Book a free intro call to scope it.