Guide
Technical due diligence for investors and founders
Technical due diligence is an independent audit of the software, architecture, and team behind a deal, so an investor or acquirer knows what they are buying and a founder knows what they are selling. This guide covers what a good audit looks at, what the report should contain, and how to act on it.
What technical due diligence is for
Due diligence exists to turn unknowns into priced risks. An investor sizing up a technical bet, or a founder preparing for a raise or a sale, needs an honest read on whether the software is an asset or a liability dressed up as one. A good audit does not produce a pass or fail; it produces a ranked list of what is solid, what is fragile, and what would cost real money to fix, so the deal can be priced with eyes open.
What a good audit looks at
A thorough audit reads the codebase, the architecture, and the deployment setup, then weighs them against what the business actually needs rather than a generic checklist. It looks at technical debt and how much it is slowing delivery, key-person risk and whether the system would survive a departure, security exposure, and whether the architecture can carry the growth the plan assumes. The point is not to find every flaw; it is to find the ones that change the decision.
What the report should contain
A report a lawyer or a non-technical partner cannot read is a report that fails its job. The main document should be plain language: a ranked risk register, each item with its severity and a rough cost to fix, and a short summary of what it all means for the deal. The deep technical detail belongs in an appendix for the people who want it. The best report ends in a debrief call, where the findings get walked through and the risks get weighed against the price.
Why independence matters
The most important property of a diligence provider is that they have no stake in the deal closing and are not pitching to build the thing afterwards. An auditor who wants the follow-on work has an incentive to soften the findings, and a buyer can feel it. Independence is what lets a report say the parts no one wants to hear, which are usually the parts worth paying for.