Technical Due Diligence

Technical due diligence is what a serious investor or acquirer commissions before money changes hands. It answers one blunt question: does the technology actually support the valuation, or is the story better than the codebase. A proper review covers code quality and maintainability, the architecture and whether it scales past the next order of magnitude, the security posture, the state of the test suite and delivery pipeline, the team’s real depth, and the key-person risk that sits in one founder’s head.

For the buy side, tech DD is risk pricing. You are not looking for perfect code; every company at this stage has debt and a rough SDLC . You are looking for the gap between what the deck claims and what the repository shows, and for the landmines that turn into post-close emergencies: a single engineer who knows how everything works, a license that poisons a commercial product, a compliance hole, an architecture that cannot survive the growth you are paying for.

For the sell side, getting your own tech DD done before the room does it for you is one of the cheapest ways to protect a valuation. Surprises during diligence cost you leverage; findings you already understand and have a plan for do not. Founders who run a pre-emptive review walk into the data room with answers instead of explanations.

Worked example of the single finding that moves a deal: a buyer’s reviewer discovers that the entire payments and reconciliation core was written by one engineer who left eight months ago, is undocumented, and has no tests. That is not a code-quality footnote; it is key-person risk that the acquirer will price as a discount or a holdback, because the day something breaks in that module, nobody currently at the company can fix it confidently. A founder who ran their own review would have seen this coming and either documented the module, paid for a second engineer to learn it, or at least walked into the room with a credible remediation plan. The same finding, surfaced by the buyer instead of by you, costs real money on the term sheet.

Wavect runs technical due diligence as a senior operator, not a checklist auditor, the same posture we bring to a paid discovery-phase . We have done it on both sides of the table, including data-heavy and regulated platforms, and we write findings a non-technical board can act on. It pairs naturally with our fractional co-founder work and fractional CTO mandates, where the same person who assesses the risk can help fix it.

When this matters in a software project. Before money changes hands, on either side of a round or an acquisition. The one blunt question is whether the technology actually supports the valuation or the story is better than the codebase.

What founders usually get wrong. On the sell side they walk into the data room with explanations instead of answers. A finding the buyer surfaces, a single undocumented engineer’s module, a license that poisons a commercial product, costs real money on the term sheet; the same finding you surfaced first does not.

How Wavect handles it. We review as senior operators, not checklist auditors, and write findings a non-technical board can act on. The same scrutiny powers our paid discovery, so the guide to choosing a software agency is a useful primer on judging a build team’s real depth.