Investors usually ask two questions before they commission technical due diligence: what will it cost, and will it be done before the deal timetable needs it. This article answers both. If you want to know what gets checked, our technical due diligence checklist covers that. This piece is only about money and time.
What it costs, by deal size
We price technical due diligence by the size of the deal, and we fix the price when we agree the scope. The fee is $15K to $75K per deal. The same figure is on our technical due diligence service page.
Deal size is a proxy, not the rule. It tracks what actually drives the work, which is covered below.
What drives the cost
What the investment depends on. A small venture investment needs to know whether the technology does what the founders say and where the current design stops working. A buyout needs all of that plus a remediation plan where every finding carries an estimated cost in engineer-weeks, because those findings feed the price. More riding on the answer means more work to stand behind it.
How much there is to look at. One product with one codebase is a different job from several products, several teams or several legal entities. Several entities or jurisdictions, often alongside a commercial diligence workstream, are what move the fee.
How deep the sector questions go. General engineering questions, like delivery health, key-person risk, cost base and security posture, carry across sectors. Sector-specific questions do not. Where those decide the deal, the scope has to cover them properly, or we say plainly that they sit outside it.
What the report has to answer. Agreeing on day zero which questions the report must answer keeps the scope tight. An open brief costs more and lands later.
Why fixed at scope and not hourly? Because hourly billing punishes the investor for the target's mess. When a finding takes longer to chase, that should be our problem, not a surprise on the invoice.
How long it takes
Most reviews take 2 to 8 weeks. The work follows this order:
- Scope and access. Conflict check, data-room and repository access, and agreement on the questions the report must answer.
- System and code review. Architecture, repository, delivery pipeline, dependencies and the infrastructure bill.
- Team interviews. Technical leadership and, where the deal allows, two or three engineers who are not in leadership. The gap between those two accounts is often the finding.
- Draft and challenge. The draft goes to the deal team, and findings are tested against the growth case in the model.
- Final report. Delivered with a live walkthrough. Follow-up questions for two weeks afterwards are included.
What slows it down
The analysis is rarely the bottleneck. Access is.
- Interviews booked late. If the target's engineers are only available in week two, the review waits for them. Booking those sessions on day zero saves more time than anything else.
- Slow access to code and systems. Diligence cannot start properly until the repository and data room are open.
- A brief that keeps growing. New questions added midway restart parts of the work.
- A target that is not ready. Missing documentation does not stop diligence, but it turns reading into interviewing, which takes longer.
Making the spend count
The cheapest diligence is the one that changes your decision before you sign. A report that lists every flaw without saying which ones affect the price gets skimmed and filed. Ask for findings that separate three things: what changes the valuation, what can be fixed inside the hold period and at what cost, and what explains why the asset is available at this price.
It also helps when the person who writes the findings is the person who has to act on them after close. That is how we work as fractional CTO to Landocs Private Equity in Tel Aviv: pre-close diligence and post-close value creation run by the same person. We have also been on the other side of the table. At A'alda we guided the technology due diligence for an IPO in Japan, so we know what the company being examined goes through.
The short version
Plan on $15K to $75K and 2 to 8 weeks. Get a fixed price at scope, agree the questions on day zero, and book the engineering interviews on the first day. That last step does more for the timeline than anything else you can control.
Need help thinking this through? Book a 30-min call, no pitch. Book a Free 30-Min Strategy Call →
