The Proactivity Playbook.
Proactive technology audits are reshaping deal preparation, helping sellers avoid mid-process surprises, demonstrate operational maturity and protect value when acquirers push hard on risk and execution.
Proactive technology audits are reshaping deal preparation, helping sellers avoid mid-process surprises, demonstrate operational maturity and protect value when acquirers push hard on risk and execution.
By Rob Elkin, Co-Founder of Rational Partners
Originally published in the Real Deals Due Diligence Report 2025, December 2025
The Buyer's Advantage
Most acquirers commission technology due diligence to understand what they are purchasing — a reasonable exercise in risk management. But the most sophisticated buyers are increasingly recognising a more strategic opportunity: technology DD is a powerful tool for finding leverage.
A material technology risk surfaced mid-process creates immediate asymmetry. The seller has no time to remediate, limited room to push back and few options beyond accepting a valuation haircut or walking away from the transaction entirely. More buyers should be deploying this tactic deliberately, and every seller should be aware that it exists.
This dynamic plays out with remarkable consistency across the mid-market. In one recent transaction, an acquirer's technical due diligence team identified three significant technology issues within the target company's infrastructure. The acquirer refused to proceed until two of the three issues were resolved and a credible remediation plan existed for the third.
The deal was not killed, but the protracted remediation process significantly delayed closing, stalling commercial momentum and consuming management attention for months. Time kills deals, and technology surprises consume precisely the time that transactions cannot afford to lose.
The lesson is straightforward: technology findings can be deployed as price levers just as effectively as financial or commercial discoveries. Sponsors who enter a sale process without visibility of their own technology position are handing ammunition to the other side.
According to Accenture, 83% of private equity executives believe their current due diligence approach has substantial room for improvement.
The Emerging Counter-Strategy
Sophisticated sponsors and proactive boards are no longer waiting for the buy-side process to expose technology weaknesses. Instead, they are commissioning independent technology audits 18 to 24 months before a planned exit — assessments designed with genuine rigour, delivered by advisers with no stake in a positive outcome.
Larger organisations often begin earlier still; upgrading an ERP system or remediating deeply embedded architectural debt can require years of sustained effort.
The distinction matters. This is not vendor due diligence dressed differently. The value lies in creating documentation that demonstrates organisational capability: a baseline assessment, followed by a structured remediation programme, followed by evidence of completion.
When the eventual acquirer's due diligence team arrives, the conversation shifts fundamentally. Rather than defending why weaknesses exist, the seller presents proof of operational maturity: "We identified this 12 months ago. Here is what we did about it."
Enquiries for proactive audit work have increased by approximately 2.5 times compared to reactive due diligence requests, with velocity accelerating markedly in recent months.
Anatomy of a Pre-Exit Tech Audit
A comprehensive technology audit examines five dimensions that any serious acquirer will eventually probe. Surface-level compliance is insufficient — acquirer due diligence teams are looking for operational reality, not presentation decks.
Critically, the operational experience of the audit provider determines the credibility of the findings. Specialist CTO consultancies with practitioners who have built and scaled technology organisations themselves can distinguish between theoretical best practice and what actually works under commercial pressure.
Growth Ambition — How aligned is the technology roadmap with stated growth ambitions? The most common product challenges stem not from market positioning but from weak product processes. Ownership is frequently diffused across multiple C-suite executives. Evidence of strategic product thinking — documented personas, structured feedback loops and measurable roadmap outcomes — signals maturity.
Platform — Can the architecture scale to support the business case being sold? What is the real cost of technical debt — not the optimistic version presented to the board, but the one that emerges under scrutiny? Technical debt consuming 30% of engineering capacity severely constrains strategic initiatives.
Process — Is the development methodology mature enough to support integration or carve-out? Acquirers look for evidence of operational discipline: consistent deployment practices, documented incident response and quality assurance that goes beyond manual testing. Sprint commitments experiencing 50% mid-cycle disruption indicate process immaturity that will concern any buyer.
Protection — Security has moved from an operational concern to a valuation-shaping diligence workstream. Acquirers now examine threat pathways, control maturity, resilience across supplier networks and compliance posture. A security incident mid-transaction can derail even the most commercially attractive proposition.
People — Where are the key-person dependencies? What happens if the CTO departs post-acquisition? Is critical knowledge documented or concentrated in individuals? Can the organisation scale from 30 engineers to 100? These questions determine whether the technology organisation represents an asset or a liability in integration planning.
Evidence File Building
The practical output of a pre-exit audit goes well beyond a standalone report, becoming the first entry in an evidence file that documents the journey from issues identified to issues resolved.
This evidence file typically comprises baseline scoring across each dimension, prioritised recommendations with clear sequencing — addressing what must happen now, what follows next, and what can wait — alongside cost indications. The structure enables tracking of remediation progress in a format that acquirers recognise and trust.
The credibility premium of independent assessment over self-reported improvements cannot be overstated.
One SaaS business commissioned a technology audit approximately 12 months before a planned private equity investment. When the investor's due diligence team subsequently engaged, they reviewed progress against the earlier audit findings first. The seller could demonstrate measurable advancement across multiple dimensions, allowing the due diligence to focus on forward-looking strategic questions rather than excavating historical problems.
The conversation shifts from "why does this problem exist?" to "here is how we identified and addressed it."
Beyond Risk Mitigation
A thorough technology audit delivers value beyond defensive positioning. It identifies technology-enabled growth opportunities that might otherwise remain invisible to non-technical leadership.
The audit findings inform the final 18 to 24 months of value creation activity. Which technology investments will most credibly support the growth narrative being presented to acquirers? Where can delivery velocity be improved to demonstrate operational momentum? What quick wins can be achieved to build confidence in the technology organisation's capability?
For operating partners managing multiple portfolio companies, the audit establishes a baseline for ongoing technology reporting at board meetings. Progress against the structured framework can be tracked quarter by quarter, providing visibility into remediation momentum and ensuring technology remains appropriately prominent in governance discussions as the company builds toward exit.
Taking Control of the Tech Narrative
The shift from reactive to proactive technology assessment is undeniably becoming mainstream in deal preparation.
The payoff is clear: sponsors who commission early audits gain fewer surprises, tighter alignment between technology capability and commercial messaging, and a clearer route to value realisation.
Technology will be scrutinised during a transaction. The only variable is whether that scrutiny happens on your terms or someone else's.
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