Tech due diligence: how to prepare your IT architecture for a Series A
From the Series A at the latest, investors take a close look: does the technology scale? Does the company really own its intellectual property? How big is the risk of a data breach? A technical due diligence answers these questions – and can delay a round or push down the valuation if it is poorly prepared.
The good news: most points can be sorted out in a few weeks if you start early.
What investors examine
The exact scope differs by fund, but almost every review covers five areas:
- Architecture and scalability: can the system carry the planned growth – or does it need an expensive rebuild after the round?
- Code quality and processes: are there tests, code reviews and a traceable release pipeline?
- Security and data protection: how is customer data protected? Is processing compatible with the Swiss FADP and – for EU customers – the GDPR?
- Intellectual property: have all rights from employees, freelancers and agencies been properly assigned to the company? Which open-source licences are in use?
- Team and dependencies: does knowledge depend on a single person? How is the team organised?
Checklist: the key preparations
Architecture
- Current architecture diagram with all systems, data flows and third parties
- Known bottlenecks and a realistic plan to resolve them
- Documented decisions (e.g. architecture decision records)
Code and delivery
- Repository access with a traceable history
- Automated tests and a CI/CD pipeline that is used regularly
- An honest overview of tech debt – investors value transparency more than perfection
Security and data protection
- Access concept: who can access production and customer data?
- Backups and a tested restore process
- Record of processing activities and data processing agreements with vendors
Intellectual property
- Employment and service contracts with a clear assignment of rights
- List of open-source components in use and their licences
- Domains, cloud accounts and app store accounts owned by the company – not by individuals
The most common pitfalls
- Missing IP assignments from former freelancers or agencies. Obtaining them later is painful – start here.
- Knowledge monopoly: the founder or first developer is the only person who understands the system.
- No documentation: without diagrams and decision notes, every reviewer question takes longer.
- Infrastructure security gaps: shared admin accounts, no two-factor authentication, unencrypted backups.
Who should lead the preparation
Many startups have no experienced CTO before the Series A. That is exactly when outside support pays off: a fractional CTO can run the assessment, prioritise the gaps and represent you in conversations with the reviewers. If the leadership gap is bigger, an interim CTO takes technical ownership beyond the funding round.
Conclusion
A technical due diligence is not an exam you pass or fail – it shows investors how professionally you handle risk. If you sort out architecture, IP and security early, you negotiate from a stronger position.
Facing a funding round? Talk to us – we will show you where you stand and what to do before the review.