Financials, forecasts, and testimonials all have their place—but none can answer the critical question: “Is the technology actually built to scale?” That’s where the role of technical due diligence comes sharply into focus.
Compared to Financial Due Diligence
The Head of Investment at a growth equity firm recently faced a dilemma. The financial metrics of a software company were impressive—revenue growth, margins, CAC-to-LTV ratios—all pointing in the right direction. But once the acquisition was finalised, product delays began to surface. Hidden dependencies, undocumented APIs, and a lack of scalability in the codebase were suddenly visible.
This scenario is not rare. While financial due diligence validates the business case, it rarely touches code quality, architecture, tech debt, or scalability. That’s the realm of technical due diligence—a parallel evaluation that assesses the viability of the product as a sustainable, scalable asset. Financials can reveal history. Technical insights forecast the future, and more importantly, they reveal execution risk hiding beneath performance metrics.
Compared to Vendor Product Demos
The CTO of a large conglomerate was considering integrating a third-party AI tool. Vendor demos were polished, the UI intuitive, and use cases well-documented. However, during a sandbox integration test, their internal tech team uncovered performance issues, data leakage risks, and a backend stack dependent on deprecated libraries.
Relying solely on vendor presentations is risky. What you see is often what the vendor wants to show. In contrast, due diligence that is technical digs behind the curtain. It reviews codebases, architecture diagrams, integration protocols, and dev workflows. Unlike a polished demo, it surfaces the technical truths that matter to long-term adoption and operational risk.
Compared to Management Presentations
A VC firm sat through a detailed session where a startup’s executive team confidently discussed their product roadmap, hiring plans, and “next-gen” stack. But when a third-party engineer was brought in for a closer look, they discovered a monolithic codebase barely held together with duct tape and optimism. No CI/CD pipeline. No test automation. Critical components undocumented.
Management presentations are designed to inspire. They’re important—but they’re narrative-driven. Technical due diligence, by contrast, is evidence-driven. It’s the practice of verifying the reality behind the rhetoric. It balances the optimism of management with the objectivity of engineering discipline. It doesn’t rely on promises of what’s coming; it evaluates what’s already built and how maintainable it really is.
Compared to Industry Analyst Reports
A corporate M&A team received glowing reports from two analyst firms about a cybersecurity platform’s market performance. Adoption was rising, funding rounds were healthy, and customer logos were impressive. Still, the team opted for a hands-on review. The outcome: critical security flaws in the code, licensing issues with open-source components, and zero DevSecOps processes.
Analyst reports provide context and positioning but not validation. They interpret market sentiment, not system integrity. Due diligence that is technical provides the missing lens: a direct, first-principles review of the actual product. It gives acquirers a factual answer to the question, “Can this technology truly deliver what it claims—and scale?”
Compared to Peer References and Customer Testimonials
A digital infrastructure firm was planning to acquire a DevOps automation startup. The startup had glowing peer reviews, and several customers raved about the impact of its platform. But during the diligence process, the acquiring company’s engineers found that much of the functionality praised was manually patched together behind the scenes. The platform wasn’t truly autonomous—it was held together by a high-touch services team.
Testimonials reflect satisfaction, not technical sustainability. While user stories give valuable insight into user experience, they don’t speak to code reusability, security, or scalability. Only technical due diligence uncovers whether a product is held together by thoughtful architecture—or by brute force.
