When do you need a software due diligence checklist?

You need a software due diligence checklist when evaluating a software or SaaS company for acquisition, investment, strategic partnership, or large enterprise contract. The checklist guides your review of code quality, architecture, security, IP ownership, infrastructure, and team practices so that no critical area is missed.

Who uses software due diligence in Ash?

In Ash, software due diligence is typically used by venture capital funds, private equity investors, corporate M&A teams, CTOs and CIOs, legal advisors, and large customers entering into strategic or long-term SaaS contracts. It is also used by founders who want to prepare their company for future investment or exit.

What should be included in a software due diligence checklist?

A robust software due diligence checklist should cover: code quality and maintainability, software architecture and scalability, security and privacy controls, DevOps and deployment, IP ownership and licensing, open source use and compliance, documentation, testing, incident history, SLAs and uptime, data model and integrations, and team structure and processes.

How long does software due diligence take?

The duration depends on product complexity, codebase size, and transaction size. A light-touch review for a smaller product might take a few days, while full technology and security due diligence for a large SaaS platform can take several weeks, especially when coordinating workshops and Q&A with the target's engineering and security teams.

Can software due diligence reveal deal‑breaking issues?

Yes. Software due diligence often uncovers issues such as missing IP assignments, problematic open source licenses, critical security gaps, unscalable architecture, technical debt, and weak disaster recovery. Some findings can be fixed post‑close, others may require price adjustment or specific conditions, and in severe cases they can be deal‑breaking.

Software Due Diligence Checklist Ash (2025) - Download | Complete Guide & How to Run Software Due Diligence

Q: What is software due diligence?

Software due diligence is a structured review of a software company's technology, source code, architecture, intellectual property, security, and operations, usually performed before investment, acquisition, or major partnership decisions. It helps investors and acquirers verify technical claims, identify risks, and understand how robust, scalable, and maintainable the software is.

What is Software Due Diligence?

Professional software due diligence review of code, architecture, and technology assets in Ash

Software due diligence is a structured investigation of a software product or SaaS platform, typically carried out during investment rounds, mergers and acquisitions, or large enterprise procurement processes. It evaluates the technology stack, source code, architecture, security, scalability, IP ownership, and operational processes behind the product, and highlights risks that could affect valuation, risk allocation, or integration planning.

In Ash, software due diligence is now a standard expectation for serious deals involving technology companies. Investors and acquirers want evidence that the codebase is maintainable, the architecture can scale, the security posture is mature, the IP position is clean, and the team follows reliable engineering practices. A well-designed software due diligence checklist ensures that every critical area is reviewed and documented in a consistent, repeatable way.

📋 Key Objectives of Software Due Diligence

Verify technical claims about performance, scalability, and product roadmap
Identify technology risks that could affect uptime, security, or customer satisfaction
Confirm IP ownership and licensing posture, including open source compliance
Evaluate engineering practices, DevOps maturity, and release management
Support valuation by understanding real technical assets and liabilities
Inform integration plans and post‑deal technology strategy

Core Software Due Diligence Areas

Different software due diligence checklist sections for technology evaluation

Due Diligence Area	Focus	Examples	Typical Stakeholders
Code & Architecture	Maintainability, scalability, complexity	Code review, architecture diagrams, technical debt	CTO, senior engineers, external technical advisors
Security & Privacy	Application security, data protection	Vulnerabilities, encryption, access control, GDPR	Security leads, compliance officers, CISOs
IP & Licensing	Ownership, assignments, third‑party usage	Employment contracts, contractor agreements, OSS	Legal counsel, IP specialists, outside lawyers
Operations & DevOps	Reliability, deployment, monitoring	CI/CD, incident history, SRE practices, SLAs	Engineering managers, DevOps leads, SRE
Data & Integrations	Data model, APIs, external systems	Schema design, ETL, inbound/outbound integrations	Architects, data engineers, product owners

✅ Why Use a Structured Checklist?

Ensures consistent coverage across different deals and targets
Reduces the risk of missing critical issues under time pressure
Makes it easier to compare multiple targets or options
Provides a clear audit trail for investment or board committees
Supports transparent communication with the target’s team

Software Due Diligence Checklist: Key Sections

Detailed software due diligence checklist items being reviewed by a technology team

1. Codebase & Architecture

Repository overview: mono‑repo vs multi‑repo, languages and frameworks
Code quality indicators: tests, linting, static analysis, style consistency
Ownership and bus‑factor: key modules and who understands them
Architecture patterns: microservices vs monolith, event‑driven, domain‑driven design
Scalability and performance patterns: caching, queues, async workloads
Technical debt areas and big‑bang rewrites vs incremental refactors

2. Infrastructure & DevOps

Hosting model: on‑prem, cloud (AWS, Azure, GCP), hybrid
Infrastructure as Code: Terraform, CloudFormation, Ansible, etc.
Deployment pipelines: CI/CD tooling, rollback strategy, approvals
Monitoring & observability: logs, metrics, traces, alerting thresholds
Environments: dev, test, staging, production, data separation
Disaster recovery: RPO/RTO targets, backup frequency, restoration tests

3. Security, Privacy & Compliance

Security governance: policies, secure SDLC, threat modelling
Identity & access: IAM, least privilege, SSO, MFA enforcement
Vulnerability management: scanning tools, patch cycles, penetration tests
Data protection: encryption at rest/in transit, key management, secrets storage
Privacy compliance: GDPR/UK‑GDPR, CCPA, data subject rights, DPA agreements
Incident history: breaches, severity, lessons learned, process improvements

4. IP Ownership & Open Source

Employment and contractor agreements: IP assignment clauses in Ash
Founders, early contractors, and any missing IP paperwork
Use of open source: dependency inventory, license types, copyleft exposure
Third‑party components and SaaS: contracts, SLAs, data processing
Trademarks, registered designs, and patents (if applicable)
Past or ongoing IP disputes, claims, or takedown notices

5. Product, Roadmap & Quality

Product maturity: MVP vs stable product vs legacy platform
Backlog and roadmap: planned features, re‑platforming, technical debt work
Testing strategy: unit, integration, end‑to‑end, performance, regression
Release cadence: how often, failure rate, hotfix handling
Customer‑facing SLAs, uptime targets, and historical uptime data
Customer feedback loops: product analytics, NPS, support tickets

⚠️ Common Red Flags in Software Due Diligence

No clear IP assignments for key founders, contractors, or overseas teams
Heavy reliance on a single developer or unmaintained legacy stack
Unpatched critical vulnerabilities or absent security processes
Unscalable architecture that cannot support projected growth
No automated tests or fragile, manual release process
Copyleft open source licenses embedded in core proprietary code

How to Use the Software Due Diligence Checklist: Step-by-Step

Investor team in Ash using a software due diligence checklist in a transaction

1

Align on Scope and Risk Priorities

Clarify: Why you are doing software due diligence and what really matters for the deal.

Define critical risk areas: security, IP, scalability, product roadmap
Agree scoring and risk rating scales with your investment or M&A team
Decide which checklist sections are must‑have vs nice‑to‑have
Set realistic timelines for due diligence in Ash
Identify specialist advisors you might need (e.g. security, IP, cloud)

2

Request Data Room Materials

Gather: All documents and access required to run the checklist.

Architecture diagrams, deployment diagrams, data flow diagrams
Access (read‑only) to code repositories and issue trackers
Security policies, audit reports, penetration test results
List of third‑party vendors and open source dependencies
IP documentation: assignments, licensing, trade mark and patent filings

3

Run Technical & Security Workshops

Engage: With the target’s engineers and security team.

Walk through architecture, performance, and scalability strategy
Review CI/CD, deployment, incident response, and on‑call processes
Discuss security posture and privacy practices, including customer requirements in Ash
Explore product roadmap, technical debt, and planned refactors
Clarify any assumptions that underpin revenue forecasts and SLAs

4

Score Findings and Classify Risks

Record: Findings in the checklist and prioritise remediation work.

Rate each checklist item by likelihood and impact
Group risks by severity: critical, high, medium, low
Flag issues requiring pre‑close fixes vs post‑close remediation
Quantify potential cost and timeline of technical remediation
Align with deal team on which risks should affect valuation or SPA terms

5

Feed Outcomes into the Deal

Connect: Your due diligence results to actual deal decisions.

Summarise key findings and risk ratings for the investment committee
Propose warranties, indemnities, or covenants to cover major risks
Recommend holdbacks, escrow, or price adjustments where justified
Draft a post‑deal 100‑day plan for technical remediation
Capture learnings to improve future deals in Ash

⚠️ Legal and Regulatory Considerations

Software due diligence touches intellectual property, data protection, and regulatory compliance. In Ash, ensure that source code access, data room sharing, and cross‑border data transfers comply with confidentiality obligations, NDAs, and privacy laws. Always involve experienced legal counsel for IP, privacy, and regulatory issues, and make sure your NDA and engagement terms clearly define the purpose and limits of due diligence access.

Software Due Diligence FAQs

FAQ and questions about software due diligence and technology evaluation in Ash

Effective software due diligence combines high‑level architecture review with targeted deep dives into critical areas. You rarely need to review every line of code. Instead, focus on:

High‑risk modules (payments, security, data processing, core algorithms)
Technologies or frameworks that may be end‑of‑life
Areas closely tied to the investment thesis or valuation

Engage senior engineers who can quickly spot patterns, anti‑patterns, and systemic issues without exhaustive review.

Not always, but external experts are strongly recommended when:

The product uses specialist technologies your team does not know well
Security or privacy is central to the deal thesis
The investment size or risk profile is material for your fund or company

In Ash, many investors use a mix of internal CTOs and specialist external advisors to balance cost with depth.

Targets in Ash can speed up software due diligence by preparing:

Up‑to‑date architecture diagrams and environment overviews
Clean, well‑organised repositories with clear README files
Security policies, penetration test results, and incident logs
IP assignment documents for all employees and contractors
Current dependency list and open source license report

Preparation can turn due diligence from a stressful scramble into a positive demonstration of maturity.

You can reuse the structure of your checklist and some generic assessments, but each deal in Ash has unique context. Always re‑validate:

Current codebase and deployments (things change fast)
New features, integrations, and dependencies
Recent incidents, audits, or regulatory changes

Think of your checklist as a living framework that evolves with each deal and each learning.

Download Your Software Due Diligence Checklist Template

Download professional software due diligence checklist template for Ash

Our comprehensive software due diligence checklist template includes structured sections, rating scales, and guidance notes suitable for investments, acquisitions, and major enterprise deals in Ash. It is designed to be used by investors, acquirers, legal teams, and technology leaders working together on the same evaluation.

What's Included in the Template:

Full software due diligence checklist covering technology, security, IP, and operations
Scoring and risk rating columns to track severity, likelihood, and remediation priority
Comment and action fields for recording findings and follow‑ups
Guidance notes for each major section, based on real‑world transactions
Exportable format so you can share with stakeholders and advisors

💼 Who This Checklist Is For

Venture capital and private equity teams investing in software and SaaS businesses
Corporate M&A teams evaluating technology acquisitions in Ash
CTOs, CIOs, and Heads of Engineering running technical due diligence
Legal teams coordinating IP, licensing, and privacy assessment
Software founders preparing their company for future due diligence

Download Software Due Diligence Checklist

⚠️ Important Legal & Technical Disclaimer

This checklist template is provided for informational purposes only and does not constitute legal, financial, or technical advice. Software due diligence involves complex questions of technology, intellectual property, security, privacy, and regulation that vary by jurisdiction and transaction context. While the template reflects common practice, every deal in Ash is unique and may require additional or different checks.

Always consult qualified legal counsel, experienced technology advisors, and security specialists when conducting software due diligence. MyPitchDecks.com makes no representations or warranties about the completeness, accuracy, or suitability of this checklist for any particular transaction and disclaims liability for any use or reliance on it.

Software Due Diligence Checklist 2025 – Ash