Startup Technology Due Diligence: a Practical Checklist

Startup Technology Due Diligence: a Practical Checklist

Technology due diligence is where optimistic decks meet reality. Having led technical reviews on both sides of the table — as an investor and as the executive being reviewed — I use a checklist that fits on one page. It will not replace a full audit, but it catches the majority of deal-killing problems early.

Architecture and scalability

  • Can the team draw the entire system on one whiteboard, including third-party dependencies?
  • What breaks first if load grows 10×? An honest answer here is a green flag by itself.
  • How much of the “proprietary platform” is genuinely proprietary, and how much is configuration of open-source or cloud services? Neither is bad — misrepresenting it is.
  • Is there a single point of failure: one server, one region, one irreplaceable engineer?

Team and process

The strongest technical signal is rarely the code itself — it is how the team changes it:

  • Version control discipline, code review, CI with automated tests that actually run.
  • A deployment path that does not depend on one person’s laptop.
  • Bus factor: what happens if the CTO is unavailable for a month?
  • A realistic view of technical debt. Every startup has it; mature teams can list theirs.

Security and data

After years of consulting in information security, I check these before anything else:

  • Where does personal data live, and who can access production?
  • Secrets management: are credentials in the repository? (You would be surprised how often.)
  • Basic hygiene: TLS everywhere, patched dependencies, offboarding process for departed staff.
  • For regulated markets: GDPR posture, data-processing agreements, incident history.

Intellectual property

  • Is the IP actually owned by the company — not by a contractor, a previous employer, or a co-founder who left?
  • Contributor agreements for everyone who touched the code, including freelancers.
  • If patents are claimed, what exactly do they cover and in which jurisdictions? Having filed and defended patents myself, I read the claims, not the marketing summary.

What I consider red flags

  • Demos that cannot be shown live “for security reasons”.
  • A codebase the founders cannot navigate during a screen share.
  • Metrics dashboards assembled the night before the meeting.
  • Hostility toward the diligence process itself — the strongest predictor of a difficult partnership later.

None of these alone kills a deal; patterns do. And the reverse is also true: a team that opens its repository, admits its debts and explains its trade-offs is telling you exactly how it will behave as a portfolio company. That is the team worth backing.