What Technical Due Diligence Actually Evaluates
A thorough technical due diligence engagement gives investors confidence that the product can scale with the business, that the engineering team can execute without the founding engineer, and that there are no hidden technical liabilities that would appear as material costs post-close.
What We Review
Architecture and scalability. Can the system handle 10× current load? Where are the single points of failure? What is the cost structure per unit of revenue at 10× scale? We run actual load tests — we do not accept architecture diagrams as evidence.
Code quality. Test coverage on core business logic, documentation quality, dependency freshness, and technical debt accumulation patterns. We specifically look for “founder code” — areas written by a technical founder that no other engineer fully understands.
Security posture. Automated CVE scanning of dependencies, authentication and authorisation implementation review, data handling practices for any regulated data categories.
Most Common Deal-Impacting Findings
- No automated tests on core business logic (very common, typically negotiated as a pre-close remediation commitment)
- All engineering knowledge held by one person who has not documented anything (red flag, typically requires team building as a closing condition)
- Significant security vulnerabilities in user data handling (deal killer)
- Architecture that cannot scale beyond current load without a near-complete rewrite (major valuation discount)