Technical Due Diligence Checklist for Investors
What investors will ask about your tech—and how to prepare.
Technical due diligence can make or break a funding round. Investors want to know your technology is an asset, not a liability. Here's exactly what they'll scrutinize—and how to prepare.
1. Architecture & Scalability
What they're asking: Can this system handle 10x growth without a rewrite?
Checklist:
- Architecture diagram exists and is current
- Database can scale (sharding strategy, read replicas)
- Horizontal scaling is possible (stateless services)
- No single points of failure identified
- Load testing has been performed
2. Code Quality & Technical Debt
What they're asking: Is this codebase maintainable, or will we need to rewrite it?
Checklist:
- Codebase follows consistent style guidelines
- Test coverage exists (aim for 60%+ on critical paths)
- Technical debt is documented and prioritized
- Dependencies are up to date (no critical vulnerabilities)
- README and documentation exist
3. Security & Compliance
What they're asking: Will this company end up in the news for a data breach?
Checklist:
- Authentication uses modern standards (OAuth, JWT, not custom)
- Sensitive data is encrypted (at rest and in transit)
- Security audit or pen test completed (or scheduled)
- GDPR/CCPA compliance addressed if applicable
- Secrets management in place (not hardcoded)
4. Infrastructure & DevOps
What they're asking: Can the team ship reliably and recover from failures?
Checklist:
- CI/CD pipeline exists and is used
- Infrastructure is code (Terraform, Pulumi, etc.)
- Monitoring and alerting in place
- Backup and disaster recovery plan exists
- Deploy frequency tracked (aim for weekly+)
5. Team & Knowledge
What they're asking: If the CTO leaves, can the company survive?
Checklist:
- No single person holds all critical knowledge
- Onboarding documentation exists
- Code ownership is distributed
- Team can articulate technical decisions and tradeoffs
6. IP & Licensing
What they're asking: Does the company actually own its technology?
Checklist:
- All code written by employees/contractors with IP assignment
- Open source licenses are compatible with business model
- No copyleft (GPL) code in proprietary product
- Third-party API usage within terms of service
Preparing for Due Diligence
Don't wait until you're fundraising to address these items. Start now:
- Run a self-audit — Use this checklist to identify gaps
- Document everything — Architecture, decisions, known issues
- Fix critical issues — Security vulnerabilities, single points of failure
- Create a data room — Organize documentation for easy access
The Bottom Line
Technical due diligence isn't about having perfect technology—no early-stage company does. It's about demonstrating that you understand your technical risks, have a plan to address them, and can articulate tradeoffs clearly.
The founders who prepare well don't just pass due diligence—they build investor confidence that increases valuations and speeds up deal closing.
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