What is Technical Due Diligence Process?
Technical due diligence is a systematic evaluation of a target company's technology assets, architecture, team, processes, and technical risks — conducted during M&A, investment, or PE acquisition.
Technical due diligence is a systematic evaluation of a target company's technology assets, architecture, team, processes, and technical risks — conducted during M&A, investment, or PE acquisition. The goal is to identify hidden technical liabilities that could destroy post-acquisition value.
Key assessment areas: Architecture quality (scalability, maintainability, security), Technical debt burden (using the Product Debt Index), Team capability (retention risk, key-person dependencies), DevOps maturity (deployment frequency, incident response), IP ownership (code ownership, OSS license compliance), and AI/data assets (training data rights, model portability).
Richard Ewing's R&D Capital Audit framework is designed specifically for PE/VC technical due diligence, providing quantitative metrics (PDI, TID, Innovation Tax) rather than subjective assessments.
Why It Matters
40% of M&A deals destroy value, and undetected technical problems are a leading cause. A $10M platform migration that wasn't identified in due diligence can wipe out the entire deal premium.
Frequently Asked Questions
What is technical due diligence?
A systematic evaluation of a company's technology during M&A or investment. Covers architecture, technical debt, team, processes, and technical risks that could affect deal value.
How long does tech DD take?
Typically 2-4 weeks. Compressed DD (1 week) is possible for smaller targets. Full forensic audit (6-8 weeks) for complex enterprise platforms. Always include code review, not just interviews.
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Richard Ewing is a Product Economist and AI Capital Auditor. He helps companies translate technical complexity into financial clarity.
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