Technical Due Diligence
Also known as: Tech Diligence, Technology Due Diligence, TDD
Definition
Technical due diligence evaluates whether a technology company's product, architecture, infrastructure, engineering organization, security posture, data model, and delivery process can support the transaction thesis. It turns technical risk into commercial, financial, and integration implications.
Technical diligence should not be a code review in isolation. The real question is how the technology affects EBITDA, customer retention, roadmap confidence, security exposure, and integration timing.
In middle-market deals, the winning diligence memo translates engineering findings into buyer decisions.
Related terms
- DORA Metrics — Four software-delivery metrics: deployment frequency, lead time for changes, change failure rate, and time to restore service.
- Financial Due Diligence — Diligence that validates reported revenue, EBITDA, working capital, debt-like items, cash flow, forecasts, and accounting policy.
- Technical Debt — The cumulative cost of architectural, platform, testing, and operational shortcuts in software systems — convertible to dollar EBITDA drag and exit-multiple turns.
Where this gets applied
- Technical Debt — Quantification in dollars, not adjectives. Then a remediation plan that runs in parallel with delivery.
- Migration & Integration — Post-merger integrations that hold customer and staff retention. 95% / 100% achieved on complex divestitures.
- Compliance & Security — SOC 2, CMMC, FedRAMP, security baselines for post-acquisition standardization.