Where the business has a product rather than only systems, a buyer's engineers read what produced it. Technical diligence is that review, and it is the stream most likely to surprise an owner who has never had their code looked at by strangers.
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The M&A technology due diligence checklist
Architecture and how it scales, the dependency inventory with licenses checked, code quality and test coverage, deployment and rollback practice, monitoring and alerting, the security posture and any incident history, data handling and privacy, and technical debt stated plainly with what it would cost to clear.
The people question underneath it
Who understands the system, how many of them there are, and what happens if one leaves. Key person risk in engineering is concentrated and buyers price it hard. Documentation, a second person who can deploy and debug, and a written runbook are worth more than a tidy codebase with one author.
Software due diligence: ownership of what is being sold
Assignments from every contractor and employee who wrote anything, trademarks registered to the company rather than to a founder, and no copyleft licensed component sitting inside a commercial product. This is the finding that stops deals rather than repricing them, and it is much easier to fix a year out than during exclusivity.
Questions people ask about technical due diligence checklist
Should I run my own technical review first?
On a deal large enough to justify it, yes. It finds what theirs will find while there is still time to fix it.
Will they read all the code?
No. They sample, run automated analysis, and interview the engineers. What they are testing is whether the team's account of the system matches what they see.
Is technical debt fatal?
Almost never if disclosed with a cost attached. Discovered debt is priced far more harshly than declared debt.
What does technology due diligence in mergers and acquisitions review?
Where the business has a product rather than only systems, the buyer's engineers read what produced it: the architecture, the dependencies and their licenses, the code and its tests, the security record, and who on the team actually understands the system.