Evolving Tech DD for a Changing World
Tech Due Diligence (Tech DD) has traditionally been focused on code quality, architecture, scalability, and security. While these remain critical, the expectations from investors and acquirers are expanding.
The technology landscape is evolving rapidly, and so must the lens through which we assess it. The future of Tech DD must address new categories that go beyond technical assessments and delve into the broader impact of technology.
In true ‘Tomorrow’s World’ style, here are some key emerging areas that could shape the next generation of Tech Due Diligence.
1. Technical Workforce Diversity & Inclusion
The makeup of a tech team and founding team is changing. More ‘creators’ and less ‘doers’ are needed and a diverse technical team is no longer just a ‘nice-to-have’; it is a competitive advantage.
Companies that embrace diversity in their engineering teams foster innovation, improve problem-solving, and create more resilient businesses.
Future Tech DD will evaluate how well companies integrate inclusive hiring practices and support diverse talent. Investors want to know if teams bring different perspectives that drive creative problem-solving.
2. Social Responsibility & Ethical Considerations
Tech companies wield immense power in shaping society. With the rise of AI, automation, and data-driven decision-making, ethical concerns are at the forefront.
A robust Tech DD process should assess whether a company adheres to responsible AI principles, data privacy regulations, and ethical business practices. Is the company transparent about its AI models?
Does it have mechanisms to mitigate algorithmic bias? These questions will become essential in evaluating technology businesses.
3. Innovation as a Measurable Asset
Innovation is not just about patents and R&D budgets; it’s about how a company fosters and implements new ideas. Future Tech DD will need to assess the effectiveness of innovation pipelines, whether through internal research, external partnerships, or open-source contributions.
Does the company actively experiment and iterate? How well does it turn ideas into commercial success? Measuring a firm’s ability to innovate is as crucial as analyzing its technical debt.
4. Energy Efficiency & Sustainability
Investors and regulators are increasingly scrutinizing the environmental impact of technology. Data centers, blockchain operations, and AI workloads consume vast amounts of energy. Future Tech DD will evaluate a company’s energy efficiency measures, carbon footprint, and commitment to sustainable computing. Are they using energy-efficient cloud providers?
Have they adopted best practices for reducing computational overhead? These factors will be key differentiators in future tech assessments.
5. Team Alignment & Assessment in the Age of AI
As AI advances, the need for traditional coders is decreasing, and the demand for creative problem-solvers is growing. Future Tech DD must assess how well teams are aligned to this shift. Companies need people who can think beyond code—those who bring strategic thinking, adaptability, and cross-functional collaboration.
Our Kolbe Team Psychology Assessment service has proven to help tech teams (up to 70 people) design the right balance of skills, ensuring the best fit for modern AI-driven environments. By leveraging psychoanalysis and cognitive diversity, we help businesses structure teams for maximum efficiency and innovation.
A Future-Proof Tech Due Diligence Model
As technology continues to reshape industries, Private Equity investors and acquirers need a Tech DD model that looks beyond code reviews and infrastructure assessments. By integrating diversity, ethics, innovation, sustainability, and team alignment into Tech DD, we provide deeper insights into the long-term viability of a technology company.
The future of Tech DD is not just about identifying risks but unlocking new opportunities. By embracing these evolving categories, we can help investors make more informed decisions and ensure that the technology they invest in is not only robust but also responsible and future-ready.
If you’re looking to assess your technology through a future-proof lens, get in touch with us today.
