Investors often see the term “Tech DD” and assume it covers everything. In reality, there are multiple types of due diligence—each with a different focus, different expertise, and different outcomes.
For anyone making an investment decision or simply wanting more insight into a target company, it’s helpful to understand how IT DD, Product DD, Tech DD, and Digital DD differ.
1. IT Due Diligence
Focus: Back-office systems, internal tools, infrastructure, and revenue-critical processes (like order-to-cash).
Key Role: CIO or IT leadership.
Why It Matters: This assessment often reveals security, compliance, and operational risks. Investors want to see whether existing infrastructure can scale—and how costly it will be to fix any existing issues.
2. Product Due Diligence
Focus: The functionality, value proposition, and roadmap of a product.
Key Role: Chief Product Officer (CPO).
Why It Matters: It evaluates how a product works, how well it fits customer needs, and whether it can adapt to future market changes. Investors gain insight into the strategic direction and potential ROI. An AI solution in retail, for example, must demonstrate that it can deliver quantifiable benefits and remain competitive.
3. Tech Due Diligence
Focus: Comprehensive evaluation of the software’s codebase, architecture, and team behind it—especially for SaaS companies.
Key Role: Tech DD specialists or CTO-level expertise.
Why It Matters: This is where the in-house developed software can get “untangled” to understand complexities, risks, and scalability. Post-deal strategies are based on these findings—where to invest, how to streamline, and how to commercialise efficiently.
4. Digital Due Diligence
Focus: Marketing funnels, digital channels, and online customer acquisition.
Key Role: Digital marketing and analytics experts.
Why It Matters: Though Beyond M&A may not deliver this type of DD, it’s an essential component for many investors. They assess how effectively a company leverages SEO, Google Ads, LinkedIn campaigns, and other digital tools for sustainable revenue growth.
Why the Distinction Matters
When investors look at a target, they need clarity on where the biggest risks and opportunities lie—especially in technology-focused businesses. A single label like “IT DD” can obscure the real issues. That’s why understanding each slice of diligence helps align your investment thesis and ensures everyone engages the right specialists.
At Beyond M&A, we work on IT Due Diligence and Tech Due Diligence, but we also emphasize Product Due Diligence when required. Knowing how each piece fits together keeps our analysis accurate and our recommendations actionable.
Follow-Up Questions for Investors
- How might your investment thesis change if you discover severe infrastructure gaps during IT DD?
- What benefits could you gain from performing a dedicated Product DD before finalizing a deal?
- When does it make sense to extend a Tech DD process to include Digital DD or vice versa?
