What is technical due diligence?
Technical due diligence — TDD or tech diligence — is the workstream that evaluates a target's technology and engineering: the architecture, the codebase, the infrastructure, the security posture, and the team that builds and runs it. It is most prominent in software, technology, and any deal where the product itself is the asset being bought.
Its central question is whether the technology can support the future the buyer is paying for. A product that works today but cannot scale, sits on aging infrastructure, or depends on a handful of irreplaceable engineers is a different asset than its revenue alone suggests.
TDD also quantifies the hidden cost of ownership: the technical debt, the security remediation, and the platform investment a new owner will have to fund — money that comes straight out of the returns the deal model assumes.
What technical diligence examines
TDD works across the product, the platform, and the people who build it.
- Architecture and scalability. Whether the system can handle the growth in the plan, and what it would take to scale it.
- Code quality and technical debt. The state of the codebase, the accumulated shortcuts, and the cost of paying them down.
- Security and compliance. Vulnerabilities, data handling, and whether the posture meets the standards the target's customers and regulators expect.
- Infrastructure and dependencies. Hosting, third-party dependencies, licensing, and single points of failure.
- Team and process. The depth of the engineering organization, key-person risk, and how the team ships — because the people are often the real asset.