The due diligence call that changes everything
You've made it to the term sheet. The investors are serious. Their technical advisor schedules a call — a "standard technical review." Two weeks later you receive a report with 23 findings. Eleven of them are marked critical. The deal doesn't fall through immediately, but the valuation conversation changes. The close date slips. Your lead investor starts asking questions you can't answer.
This scenario plays out constantly with early-stage startups. And almost all of it is preventable — not by having a perfect codebase, but by knowing what investors look for and addressing it before they ask.
The good news: Series A technical due diligence follows a predictable pattern. The questions are largely the same across funds. A fractional CTO who has been through this process knows exactly what's coming.
Why 2025 is a different environment
Three forces have converged to make technical security scrutiny significantly more intense than it was even two years ago:
What investors actually ask — and what good looks like
These are the questions that come up in virtually every Series A technical review. For each one, we've included what a strong answer looks like — and what sends up a red flag.
Series A Technical Due Diligence — The 10 Questions
Click each question to see what investors are really asking, what good looks like, and how to prepare.
What they're really asking: Are passwords hashed? Is MFA available? Are sessions managed correctly? Is there any chance user data leaks between accounts?
What good looks like: Using an established auth provider (Clerk, Auth0, Supabase Auth), MFA enabled for admin roles, no plain-text credentials anywhere, regular access reviews documented.
Red flag: Homegrown authentication with MD5 or SHA-1 hashing, no MFA, or tokens stored in localStorage.
What they're really asking: Is there a data map? Do you know if PII is encrypted at rest and in transit? Are there GDPR/Privacy Act obligations you may not know about?
What good looks like: A written data inventory, encryption at rest for PII (AES-256), TLS 1.2+ in transit, role-based access control, and a privacy policy that actually matches reality.
Red flag: "We don't really store much data" — because you almost certainly do. Or: no idea what your database contains and who can query it.
What they're really asking: Do you have incident response procedures? Do you even know if you've been breached? Do you have the logs to find out?
What good looks like: A written incident response plan, centralised logging with retention policy, and if there has been an incident — a clear post-mortem showing what changed.
Red flag: No logging infrastructure, no incident history (which usually means no monitoring), or undisclosed past incidents discovered during the review.
What they're really asking: Is infrastructure defined as code? Are environments separated (dev/staging/prod)? Are secrets managed properly? Are there wildcard IAM permissions?
What good looks like: Infrastructure as Code (Terraform or CDK), separate environments, secrets managed via a vault or secrets manager — never committed to version control, principle of least privilege on all IAM roles.
Red flag: Everything clicked together in the AWS console, root account used for day-to-day operations, API keys committed to GitHub at any point in history.
What they're really asking: Can you ship safely without breaking production? Is there a review process? Do tests run automatically before deployment?
What good looks like: CI/CD pipeline with automated tests, code review via pull requests, feature flags for risky releases, automated SAST scanning in the pipeline.
Red flag: Direct pushes to main branch, no automated tests, deployments done manually via SSH.
What they're really asking: Do you know what's in your supply chain? Are dependencies audited? Are there known CVEs sitting unpatched?
What good looks like: Automated dependency scanning (Dependabot, Snyk), a process for reviewing and acting on vulnerability alerts, a software bill of materials (SBOM) if handling regulated data.
Red flag: No automated scanning, packages last updated two years ago, or a package.json with 400 direct dependencies and no audit process.
What they're really asking: If your database disappeared today, how long to recover? Have you tested it? Do you have an RTO and RPO?
What good looks like: Automated daily backups with tested restore procedures, defined RTO (<4 hours) and RPO (<1 hour), runbook documented, at least one real restore test per quarter.
Red flag: "We think AWS backs it up automatically" — they might, but you need to own and test the process.
What they're really asking: Are you a compliance liability? Do you have the foundations that enterprise customers or regulated sectors will require post-investment?
What good looks like: A written privacy policy that matches your actual data practices, a data processing register, awareness of what compliance frameworks will be needed post-Series A and a roadmap toward them.
Red flag: A privacy policy copied from a template that references products or data types you don't have, or no awareness that your target customers will require SOC 2.
What they're really asking: Is there any code built by contractors who retain IP? Is the codebase runnable if your CTO leaves? Are there undocumented systems only one person understands?
What good looks like: IP assignment agreements with all contributors, documentation sufficient for a new engineer to onboard, no single undocumented system owned entirely by one person.
Red flag: Code built before IP agreements were in place, ex-contractors who may have claims, or a codebase that only one person can deploy.
What they're really asking: Does the architecture support the growth plan in the investor deck? Is there a plan to pay down technical debt? Does anyone technical actually own this roadmap?
What good looks like: A documented architecture with known scaling constraints, a tech debt register with prioritisation, a roadmap for the next 12 months tied to business milestones.
Red flag: "We'll cross that bridge when we come to it" for any architectural constraint that the investor deck projects you'll hit in 18 months.
What a 90-day security readiness sprint looks like
Most of what investors look for can be addressed in 90 days with the right technical leadership. It doesn't require rebuilding the product. It requires identifying the specific gaps, prioritising by investor impact, and closing them systematically.
A fractional CTO running a pre-Series A security readiness engagement typically structures this in three phases:
Phase 1 — Weeks 1–2: Technical audit
A structured review of authentication, infrastructure, data handling, dependencies, and IP status. The output is a prioritised finding register — not a 40-page report, but a working document that maps directly to the due diligence questions above.
Phase 2 — Weeks 3–8: Remediation
Working through the critical and important findings. Many of the highest-impact fixes — secret rotation, dependency scanning, MFA enforcement, backup testing — take hours, not weeks. The goal is to close the critical items and create a credible roadmap for the standard ones.
Phase 3 — Weeks 9–12: Documentation and readiness
Writing the artefacts investors actually want to see: an incident response plan, a data inventory, architecture documentation, and a security roadmap. The CTO also prepares the founder to answer the 10 questions above with confidence — because the best outcome isn't just passing the review, it's being the founder who comes across as technically credible.
Investment-ready vs. not ready — the dividing line
What separates startups that sail through technical due diligence from those that don't
The bottom line
Technical due diligence is not a test you either pass or fail — it's a conversation that either goes well or doesn't. Investors aren't looking for perfection. They're looking for a founder who understands their technical risks, owns them, and has a credible plan to manage them.
The worst outcome isn't failing the review. It's being surprised by it. A fractional CTO who's been through this process turns a potential deal-breaker into a demonstration of exactly the kind of technical maturity investors are looking for at Series A.
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