Technical Due Diligence
Technical Due Diligence is a structured assessment of a company's technology, typically performed before acquisitions, investments, or major partnerships. It evaluates the software architecture, code quality, infrastructure, security posture, technical debt, team capabilities, and scalability of technology assets. The goal is to identify risks, validate claims, and inform deal decisions. For non-technical readers, Technical Due Diligence is like a building inspection before buying property. Just as you'd want to know about structural issues or needed repairs before purchasing a building, investors and acquirers need to understand the true state of technology before committing capital. Problems found during due diligence might affect valuation, deal terms, or whether to proceed at all. Due diligence examines both the technology itself (is the code maintainable? is the architecture sound?) and the context (can the team support growth? are there legal issues with dependencies?). Reports typically highlight critical risks, areas needing investment, and overall technology health.
Official WebsiteWhen to use Technical Due Diligence
Conduct Technical Due Diligence before acquiring a technology company, investing in a startup, or entering a significant partnership where technology is material to the deal. It's essential when technology is a core value driver and when the stakes justify the assessment cost.
Due diligence is also valuable internally when taking over responsibility for unfamiliar systems, assessing technology health across a portfolio, or validating vendor claims about their technology.
Why choose Technical Due Diligence?
Organisations commission Technical Due Diligence to make informed decisions about technology-dependent investments. Hidden technical debt, security vulnerabilities, or scalability limitations can destroy deal value. Conversely, strong technology foundations can justify premium valuations. Due diligence reduces surprises and enables realistic integration planning.