Preparing for a Technical Due Diligence

CircleCI invited me to a panel on Technical Due Diligence, part of their “Startup Spaces” series. It was a great conversation, with a healthy mix of Auditors and CTOs on the roster.

These 4 tips are the summary of my sharings.

Understand the big picture

Understand the investment thesis, and capture how the technology will support and accelerate success. Is it about geographical expansion? Or is it about launching a new product? Or maybe, is about improve end to end business efficiency? Your future technology state should point in the same direction as the business.

It’s a story about the technology opportunity

You are not just sharing the characteristics of your tech stack or your process. You tell a story about the optionality created by technology; you show how technology accelerates the business to the next growth stage. Use the relevant metrics to support your message, and focus on your strength. IPs and patents are a great way to demonstrate defensibility and intrinsic value.

Think about it at 360 degrees

Although it’s easy to focus on architecture and process, cross-functional requirements are a critical part of your DD. Security, data privacy, disaster recovery are essential topics, and as a CTO, it’s your job you have an answer. These themes get more and more scrutiny the more you move through your investment rounds, and so your organisation sophistication should increase over time.

Give yourself time

Start thinking way ahead about areas that require some attention in preparation for a funding event. For example, cross-functional requirements might need time to be polished.

Prepare some collaterals ahead of time; architecture diagrams, metrics on uptime, Disaster Recovery summary will be handy. Having them ready will give you confidence and avoid the pressure of preparing them in a rush.