Tech Due Diligence (Tech DD) can lead to many areas of post-deal assitance for the manageent team and investors.
We might help a team step up to meet institutional investment requirements, guide a company through a re-platforming effort, provide oversight on large-scale projects, or act as a translator between investors and portfolio company management when complexity clouds the interpretation of value. In other cases, it supports exit planning and sell-side readiness.
But what happens when a deal fails?
While the vast majority of deals move forward in some form, a small percentage fall through, and 77% of those failures are during DD. In these cases, we often step in to help founders recover, learn, and adapt. Their initial reaction is always telling—it reveals how they handle one of the hardest business messages they’ll ever hear and whether they can extract valuable lessons from the experience.
One Failure, Two Reactions
One failure we encountered was driven by excessive unknowns in the tech stack. Issues included authentication and security weaknesses, poor documentation, and a lack of time tracking within the engineering team. On top of that, the firm was developing more than one tech product simultaneously—essentially a startup within a startup. While this approach can work under private ownership, a dual-focus strategy can be confusing for external stakeholders, especially investors.
When the CEO learned that the deal was off, he took it on the chin. He saw it as a learning opportunity, acknowledging that the red flags were too significant for investors to proceed—and, most worryingly, that he had been unaware of these risks himself. Some investors refer to situations like this as “free due diligence,” offering a small silver lining to an otherwise difficult outcome.
The CTO, however, reacted differently. More defensive in nature, he struggled with what was essentially a brutal assessment of his team’s work. It’s understandable—when a CTO has been operating in a private business for over a decade, they are often in a bubble, building a successful, profitable company but with blind spots that don’t align with investor expectations.
Coaching for Recovery and Growth
To help them recover, we introduced a set of foundational improvements:
- A clear product and technical roadmap
- Time management discipline to improve delivery tracking
- DORA metrics for engineering efficiency and performance measurement
- Security analysis to address authentication and data protection concerns
- Daily journaling for continuous reflection and improvement
- Monthly reports to provide structured oversight and demonstrate progress
The coaching itself was light touch—just an hour per month. But the impact was profound. The firm’s presentation and internal operations improved significantly. More importantly, the CTO became more confident, gained better control over his department, and developed a deeper understanding of both his technology stack and cybersecurity measures.
The Role of Coaching in Tech DD
Coaching isn’t about dictating solutions. It’s about asking the right questions, challenging the status quo, and helping teams understand what ‘good’ looks like in the eyes of investors and the wider market. In many cases, failure is the catalyst for a better, stronger business in the long run. The key is whether the leadership team is willing to learn and adapt.
At Beyond M&A, we see Tech DD as more than just a pass/fail assessment. It’s an opportunity to refine, realign, and ultimately build a company that is better positioned for investment and growth. And for those that experience a setback, the right coaching can turn failure into future success.
