One of the most surprising (and refreshing) patterns we’ve seen in late-stage diligence is this:
The strongest companies are not the ones without risks.
They’re the ones that know their risks — and are comfortable talking about them.
Not defensively. Not as a pre-rehearsed “weakness slide.” But clearly, confidently, and with intent.
It’s one of the strongest signals of scale readiness. And when done well, it changes the entire tone of diligence.
A Risk Register on Acid
We were working with a growth-stage company in Australia, preparing for a late-stage investment process. As part of our early prep, we challenged the management team:
“Put together a list of your top risks — the stuff that keeps you up at night.”
What they came back with wasn’t your typical light-touch risk register.
It was honest. Detailed. Slightly alarming.
A kind of “risk register on acid”.
We’re talking:
- Infrastructure capacity mismatched with forecasted growth
- Key-person dependencies with no succession
- Technical debt in security that would block enterprise deals
- Underpowered corporate IT making onboarding painful
This wasn’t spin. It was substance. They knew exactly where their pain points were — and they were happy to share them.
What Happened Next Surprised Everyone
When we presented this to the investor, the reaction wasn’t hesitation — it was confidence.
Instead of second-guessing what might be hidden behind polished pitch decks, the investor saw a clear map of known issues, open risks, and management’s thinking around each one.
Even better: it became a starting point for conversation.
- “What have you tried here already?”
- “Could we help you solve that post-deal?”
- “This one’s a blocker — but that one’s manageable.”
The due diligence shifted from interrogation to collaboration. That changes everything.
This Isn’t Just About Impressing Investors
Here’s the bit most people miss:
That openness didn’t just help the investor.
It helped the management team.
By being transparent, they got a feel for how the investor worked.
They saw the problem-solving style, the tone of conversation, the willingness to engage.
In short, they realised: “This is someone we can work with.”
That trust, built pre-deal, is the foundation for everything that comes next — from integration to roadmap changes to those inevitable hard conversations six months post-close.
The Real Point of Tech DD? Trust.
Too often, founders treat diligence as a final exam — something to pass.
But it’s not about acing the test. It’s about showing the real story.
Risks don’t kill deals.
Surprises do.
And trying to hide the cracks only makes them more obvious when they eventually show.
By contrast, naming your risks — clearly, early, and with confidence — does three things:
- It shows maturity and clarity
- It gives investors confidence you’re not in denial
- It builds alignment, fast
So, Raise Your Risk
If you’re going into diligence soon, ask yourself:
- Do we know our top 5 risks cold?
- Have we written them down?
- Would we feel confident talking about them with an investor — without flinching?
If the answer’s no — you’re not ready.
But if the answer’s yes? You might be more ready than you think.
This Is What We Help Teams Do
We help founders get sharp, fast, and clear — so they go into diligence aligned, confident, and ready to lead the conversation.
Not just defensively. But deliberately.
