After 80+ tech DD engagements across Europe - for VCs, PE firms, and M&A advisors - we see the same mistakes repeated. Here's what actually matters, and what doesn't.
Most PE firms approach tech due diligence the same way they approach financial DD: they send in a large consulting firm, ask for a comprehensive assessment, and receive a 60-page report two weeks later that nobody fully reads.
The result is a document that checks a compliance box rather than a tool that improves a decision.
After running 80+ tech due diligences across Europe, here's what we've learned about what actually matters - and what PE firms consistently get wrong.
The most common failure mode is a report that evaluates the technology against a generic framework - cloud architecture tick, test coverage tick, security posture tick - without asking the question that actually matters: is this technology a competitive asset or a liability for the next owner?
A legacy monolith isn't automatically a problem. A modern microservices architecture isn't automatically an asset. What matters is whether the technology serves the business's growth ambitions - and whether the team can execute against them.
In our experience, team risk is the single most underweighted factor in tech due diligence. Every acquirer looks at the code. Far fewer ask:
We've seen acquisitions go badly not because the code was poor, but because the team structure made the technology unmaintainable without its original builders.
In 2026, a team's AI adoption posture is one of the most important forward-looking signals in any tech assessment. An engineering team that is AI-native will compound its velocity advantage over the next three years. A team that is AI-resistant will fall further behind every quarter.
We now assess AI adoption in every engagement - not as a nice-to-have, but as a core element of the competitive analysis.
The best tech due diligences we've seen - and the ones we try to deliver - share a few characteristics:
The goal isn't to find reasons not to do the deal. It's to understand what you're buying - and what it will take to make it worth what you paid.
Above The Clouds delivers tech due diligence for PE firms and M&A advisors across Europe. Reports in 5–7 days, from €8,000. Get in touch to discuss your next deal.