What Is Technology Due Diligence?

Technology due diligence is the pre-close assessment of a target company's software, architecture, engineering team, and data assets to establish what they mean for the deal: where they create financial exposure, what remediation will cost, and whether the technology can carry the investment thesis. Done well, it prices risk into the offer rather than surfacing it after close.

How it works in practice

A technology diligence review runs alongside financial and commercial diligence in the weeks before close. It combines document review, interviews with the CEO, CTO or VP Engineering, and security lead, and a written deliverable built for a deal partner and board: an executive summary, a quantified view of exposure, and a first-100-days plan. The PRISM™ framework scores five dimensions and routes every finding into one of four actions: Gate, Price, Thesis, or Lever.

Where firms get it wrong

The common failure is treating diligence as a code review. A report that flags technical debt, architecture concerns, and security gaps without translating them into dollar impact, remediation timeline, and deal-thesis risk is a list, not a decision input. A target with thin test coverage and a target with an unresolved data-rights clause both read as "technical debt" on a slide: one is a multi-month engineering investment, the other can unwind the deal's IP position.

When you need it

Any deal where technology carries the thesis, sits at the center of the product, or represents a material share of the cost base warrants a real technology read before close. That is the work in the Assess engagement.