Fundraising is stressful enough without someone quietly opening up your codebase and finding out that the payments logic is held together with a Google Sheet and a prayer. And yet, this happens more often than founders expect, because technical due diligence tends to get treated as an afterthought until it's suddenly not.
Investors, especially past pre-seed, will bring in someone technical to poke around before money changes hands. Here's what they're actually looking for, and how to make sure the answers don't catch you out.
"Who actually owns this code?"
This sounds like a strange question until you realise how often the answer is complicated. Was any of this built by a freelancer who still has access? Is there open-source code in there under a licence that doesn't play nicely with commercial use? Did an early contractor never formally assign IP to the company?
Get this sorted early. It's a boring bit of admin that becomes a genuinely awkward conversation to have mid-negotiation.
"What happens if this person leaves tomorrow?"
Sometimes called the bus factor, though nobody enjoys that phrase much. If your entire technical operation lives in one person's head, with no documentation, no one else who understands the architecture, and no clean handover process, that's a red flag investors are trained to look for.
It doesn't mean you need a ten-person engineering team. It means someone other than the founder should be able to explain, in reasonable detail, how the thing works and why it was built that way.
"How does this scale?"
Not "will it scale to a billion users", nobody's asking that at seed stage. What they're actually asking is whether the architecture was built with any thought given to growth, or whether it'll fall over the moment usage doubles. This is where those over-built forty-table databases we talked about elsewhere are, ironically, not the problem. The problem is usually the opposite: quick fixes stacked on quick fixes with no one ever going back to tidy up.
Being able to say "here's what we'd need to change if we hit ten times our current load, and roughly what that would take" is a far stronger answer than pretending it's already bulletproof.
"What's your security posture?"
This one gets more scrutiny every year, and rightly so. Are passwords and sensitive data handled properly? Is there row-level security if multiple organisations share your platform? Do payment details ever actually touch your own servers, or are they handled by a proper payments provider? A clear, honest answer here does far more for investor confidence than a vague assurance that "security is a priority".
"Show me the actual product, not the pitch deck version"
Investors, particularly technical ones, want to click around the real thing. Slow load times, broken flows, or a demo environment that's clearly been dressed up for the meeting all tell their own story. This is less about perfection and more about honesty. A rough but functional product that matches what was pitched builds more trust than a polished demo that quietly doesn't reflect reality.
Getting ahead of it
The founders who breeze through technical due diligence aren't the ones with flawless codebases. They're the ones who know exactly where the weak points are and can talk about them plainly, with a plan, rather than getting caught flat-footed.
That usually means:
- A basic architecture document that explains what was built and why
- Clear IP ownership and no lingering access for people who've left
- An honest internal view of what would break first under load, and what the fix would look like
- Security basics genuinely in place, not just claimed
None of this needs to happen the week before your raise. It's far easier, and far less stressful, to build it in from the start, or to get a proper technical review done well before investors ask for one.
Heading into a raise and want your technical story straightened out before an investor's advisor finds the gaps first? Get in touch and we'll help you get ahead of it.