Tech Due Diligence for Search Funds

You’re about to acquire your first business. You’ve spent months (or years) searching, and you’ve found a target that looks right. The financials check out, the seller is motivated, and the market opportunity is real.

But the technology? That’s where most first-time acquirers have a blind spot.

Why Search Funds Need Tech DD

As a search fund entrepreneur (or ETA operator), you’re likely acquiring a business where technology is a critical component - even if it’s not a “tech company” per se. The software might be a SaaS product, an internal platform, or a critical piece of operational infrastructure.

Without tech DD, you’re taking on risks you can’t quantify:

• Hidden technical debt that could require $500K+ in engineering investment post-close
• Key-person risk where one developer holds all the institutional knowledge
• Outdated infrastructure that’s one failure away from extended downtime
• Security gaps that could expose you to data breaches and regulatory fines
• Scaling limitations that cap the upside you’re projecting

What We Check for Search Fund Deals

Our search fund assessment is thorough but practical:

1. Code and architecture review - Is the codebase healthy? What’s the estimated technical debt?
2. Infrastructure assessment - How is it hosted? What are the recurring costs? What’s the disaster recovery plan?
3. Security audit - Are there obvious vulnerabilities? Is data handled properly?
4. Team evaluation - What skills exist? What needs to be hired?
5. Vendor and license review - Any contractual risks or expiring licenses?
6. Growth readiness - Can the technology support your 5-year plan?

The ETA Operator’s Tech Checklist

We’ve distilled the most critical items into a downloadable tech DD checklist specifically useful for first-time acquirers. It covers the non-negotiables every search funder should verify.

Founder-Friendly Pricing

We understand that search funds operate with limited budgets during the acquisition phase. Our pricing reflects that reality - thorough assessment without enterprise-level fees.

Check our cost guide for typical ranges, and learn about the process so you know exactly what to expect.

Common Red Flags in Search Fund Targets

The targets search funds evaluate often share common red flags: aging technology stacks, minimal documentation, single-developer dependencies, and no automated testing. These aren’t necessarily deal-breakers - but they need to be priced in.

We help you understand what you’re buying and what it will cost to bring the technology up to standard. That’s the difference between a good deal and a money pit.