Technology Due Diligence Questionnaire Template

The Purpose of a Technology Due Diligence Questionnaire

A technology due diligence questionnaire serves as a foundational instrument in assessing the health and scalability of a target company's technology stack. Its primary objective is to systematically surface potential architectural vulnerabilities, gauge the efficacy of development operations, and evaluate the robustness of security protocols. Merely receiving answers, however, is insufficient. The value derives from the quality of the questions and the subsequent interrogation of the responses. Our experience indicates that a well-devised questionnaire can illuminate approximately 90% of the critical risks across these domains.

Constructing an Effective Questionnaire

The construction of such a questionnaire demands precision. Vague questions invite ambiguous answers; leading questions solicit biased responses. An effective questionnaire focuses on eliciting factual evidence, process descriptions, and specific examples. It avoids open-ended prompts that allow for narrative control without substance. We advocate for a structure that segments inquiries into distinct yet interdependent categories: architecture and infrastructure, development processes and organisation, and security and compliance.

Architecture and Infrastructure

This section delves into the fundamental design and operational aspects of the technology. Questions should address system scalability, resilience, redundancy, and the presence of technical debt. For instance, rather than asking, “Is your system scalable?” a more productive question would be “Describe recent instances where your system's load increased by 50% or more. What performance metrics were observed, and what measures were taken to maintain service levels?” This prompts a concrete explanation and demonstrable evidence.

Development Processes and Organisation

Understanding the target’s development methodology, team structure, and release cadence is critical. Inquiries here should explore the efficiency of the software development lifecycle, the clarity of product roadmaps, and the mechanisms for talent retention. Questions might include: “Detail your typical software release cycle, from ideation to production deployment. What are the key bottlenecks, and how are they managed?” or “Provide an organisational chart for your engineering department, noting tenure and reporting lines. What is your strategy for employee development and succession planning?”

Security and Compliance

Given the increasing regulatory landscape and the prevalence of cyber threats, a thorough examination of security practices is non-negotiable. Questions should cover data protection, access controls, incident response, and adherence to relevant industry standards. Instead of a general inquiry like, “Is your data secure?” consider asking, “Outline your data encryption strategy for data at rest and in transit. Provide evidence of recent penetration test results and the actions taken to address identified vulnerabilities.”

Mitigating Performative Responses

Sophisticated targets are adept at presenting a polished narrative. To circumvent performative answers, the questionnaire must be perceived not as an audit to be passed, but as a diagnostic tool for mutual understanding. This requires several strategic considerations:

Specificity and Evidence

Every question should implicitly or explicitly request supporting evidence. Rather than asking about the existence of a process, ask for documentation of that process. For example, “Provide your disaster recovery plan, including recent test results and recovery time objectives (RTOs) and recovery point objectives (RPOs).”

Cross-Verification

Responses should not be taken at face value. Information gleaned from the questionnaire must be cross-referenced with additional documentation, such as architectural diagrams, codebase samples, deployment logs, and security audit reports. The Lens AI data room can assist in systematically reviewing these documents, identifying discrepancies, and flagging areas requiring further investigation.

Follow-up Interviews

The questionnaire serves as a precursor to direct engagement. Key individuals within the target company—CTOs, VPs of Engineering, and Head of Security—should be interviewed to elaborate on their responses and to address inconsistencies. Our Technology Due Diligence specialists are trained to conduct these interviews, asking incisive follow-up questions that delve beneath superficial answers to uncover underlying realities.

Beyond the Questionnaire: A Holistic Approach

While indispensable, the questionnaire is one component of a broader technology due diligence exercise. It must be integrated into a holistic approach that includes in-depth interviews, code reviews (where appropriate), penetration testing, and a comprehensive review of operational metrics. By combining these methods, a clear and accurate picture of the target's technological health, its inherent risks, and its potential for future growth can be formed. This systematic approach ensures that investment decisions are predicated on a robust understanding of the underlying technology assets and liabilities.