How to Run a Technical Due Diligence? - by Sergio Visinoni

The investment thesis drives everything in technical due diligence. When you're buying a company to absorb its customer base, you don't care about their engineering practices or tech stack - you care about security risks that could bite you post-acquisition and how painful it'll be to migrate their data into your systems. When you're acquiring a company to keep it independent, suddenly talent, culture, and SDLC practices become critical because you need them to keep growing without your direct involvement. Most people apply the same checklist regardless of deal type, which is why they end up wasting time on irrelevant details while missing what actually matters.

The piece walks through four major acquisition scenarios and maps what's actually in scope for each. Acqui-hiring deals? Skip the platform assessment entirely and focus on whether the team fits your culture. Brand and client acquisition? Ignore their SDLC - you're shutting it down anyway - but dig deep into compliance risks and operational costs during the transition. Full integration plays? Now affinity between tech stacks becomes crucial because that gap determines how long and expensive the merge will be. The specific questions you ask and data you request should shift dramatically based on which category your deal falls into.

There's practical cynicism here about the process itself. The "data room" that sounds impressive is just an overpriced file-sharing app with audit trails and a UI apparently designed to maximize suffering. Confidentiality theater dominates because everyone knows what's happening but has to pretend they don't to avoid market manipulation charges. Multiple consultants sit in meetings doing nothing but enforcing communication protocols. Understanding these realities helps you navigate the bureaucracy without getting distracted from actual technical assessment.

The key insight is that your job in technical DD isn't to audit everything - it's to identify deal-breaking risks and investment requirements specific to the transaction's purpose. When leadership doesn't know why they're making the deal, that's when you fall back to generic checklists. But when there's a clear thesis, you can cut through 80% of typical DD work and focus on the handful of technical factors that could actually derail the strategy or blow up the projected returns.