Preparing for Technical Due Diligence: A Guide for Founders
Prepare a useful data room, explain known technology risks and help your team answer questions without manufacturing documentation.
Technical due diligence asks whether the technology and team can support the business the buyer or investor expects. The scope depends on the deal. An investment review can ask different questions from a review of a product that will be integrated into an acquirer’s systems.
Your first job is to understand that scope. Your second is to make the current state easy to examine.
Agree what the reviewer needs
Confirm the products and entities under review, who will be interviewed, what access is needed and when findings are due. Establish how sensitive material will be shared. If repository access is restricted, agree an alternative review method early.
Ask what decisions the report must support. Growth, integration, intellectual property and operational continuity need different evidence. A checklist helps start the conversation; it cannot set the engagement scope on its own.
Build the data room from records you already use
The Auditor’s Bench note on our Tech DD guide makes the point directly: collect existing documents, be honest about gaps and resist the temptation to fill empty folders with policies written for the occasion.
| Material | What it helps establish |
|---|---|
| Architecture and data-flow diagrams | Boundaries, dependencies and sensitive data paths |
| Repository and deployment overview | What is built, who maintains it and how changes reach production |
| Incidents and recovery tests | What happens when the service fails |
| Known technical debt and planned work | Which constraints the team recognises and prioritises |
| Team responsibilities and operational cover | Who can maintain, deploy and recover critical components |
| Supplier and IP records | Dependencies, ownership questions and contractual constraints |
Add an index with a description, owner and date for each item. Identify drafts and outdated documents. If a diagram is incomplete, say which part is missing and arrange a walkthrough with the person who knows it.
Avoid uploading several versions without identifying the current one. Volume does not make weak evidence stronger.
Write a known-issues list
Record the affected system, what you observed, the consequence and the next action. Distinguish a confirmed problem from a suspected one. If remediation has started, link the work and explain what remains.
An illustrative example: “recovery needs improvement” leaves the reader guessing. “The last restore test recovered the database but did not verify object storage” identifies a limit that the next test can address.
Explain the assumptions behind remediation estimates. A cost that depends on hiring a specialist or replacing a vendor should say so. There is no universal percentage by which an old dependency or missing test reduces valuation.
Prepare people to explain the work
Tell engineers what the review is for. Let them check the data-room documents for inaccuracies before the interview. Useful preparation covers why a design was chosen, its limitations and how the team operates it.
Choose a contact who can route follow-up questions. Record unanswered questions and supply evidence when available. If something cannot be verified during the review, keep that limitation explicit.
Fix what matters
Do not begin a major rewrite just to make the architecture look more sophisticated. Start with problems whose consequences are clear: exposed credentials, unreliable recovery, uncertain code ownership or a critical system that only one unavailable person can operate.
Some issues can be corrected before the review. Others need a credible plan and a decision from the buyer. Preparation helps explain the position; it does not guarantee the reviewer’s conclusion.
The Tech DD checklist covers code, architecture, security, team and operations. Add transaction-specific questions. The pre-acquisition report outline provides a structure for findings and actions. You can also start a Tech DD self-assessment.