How to Spot a ‘Juiced’ Tech Asset: Avoiding Artificial Toning in M&A Technical Due Diligence

When one tech company buys another, a thorough technical audit is essential. I want to show you how a target company handles this process can be a major red flag—or a clear green light.

The Critical Role of Technical Due Diligence in M&A

As an M&A due diligence consultant, I’ve watched promising deals fall apart under scrutiny. It’s like spotting artificial toning on a rare coin: the surface might gleam, but the real story is underneath. Technical due diligence isn’t just a formality. It’s what keeps you from making a costly mistake.

Why Surface-Level Assessments Fail

In coin collecting, a ‘juiced’ image can hide flaws. In tech M&A, slick demos and handpicked metrics do the same. I remember one target company with an impressive API. But when we looked closer, we found messy error handling and outdated docs. It was clear the tech asset had been artificially enhanced.

Conducting a Code Quality Audit: Looking Beyond the Shine

A real code audit checks more than just function. It asks: Is this code easy to maintain? Is it readable? Does it follow best practices?

Key Indicators of Quality Code

• Consistent Coding Standards: The codebase should look uniform, like one team wrote it.
• Comprehensive Documentation: Comments and guides must be clear and current.
• Test Coverage: Strong testing means fewer hidden bugs.

Compare these two examples:


// Good: Clear, descriptive function with error handling
function calculateUserLTV(userData) {
if (!userData || !userData.purchaseHistory) {
throw new Error('Invalid user data provided');
}
// Implementation logic here
}



// Problematic: Undocumented, prone to errors
function calc(data) {
return data.a * data.b; // What are a and b?
}


Scalability Assessment: Preparing for Growth

Scalability means handling more users without breaking the bank—or the system.

Red Flags in Scalability

Watch out for:

• Hardcoded settings that can’t adapt
• Monolithic designs that are hard to scale
• Slow database queries that get worse with traffic

One company I reviewed claimed high throughput. But their reliance on synchronous calls would have crumbled under real pressure. That’s a classic scalability red flag.

Technology Risk Analysis: Identifying the ‘AT’ in Tech Stacks

Just as coin experts debate artificial vs. natural toning, you need to tell trendy tech from solid foundations.

Common Technology Risks

• Outdated Dependencies: Using unsupported libraries
• Security Vulnerabilities: Known issues left unpatched
• Vendor Lock-in: Heavy reliance on closed tools that limit your choices

In M&A, a half-fixed risk is still a risk. Deal with it fully, or consider walking away.

Actionable Takeaways for Your Next M&A Deal

Here’s what I’ve learned from conducting technical due diligence:

1. Assemble a Cross-Functional Audit Team

Bring together engineers, security pros, and operations specialists. Each sees different risks.

2. Use Automated and Manual Reviews

Tools give you data, but people catch context. Combine both for the full picture.

3. Validate Against Real-World Scenarios

Test the tech under conditions like your own. Code reviews aren’t enough—see how it performs.

Conclusion: Look Past the Surface

M&A technical due diligence demands a sharp eye. See past the polished surface to gauge true code quality, scalability, and risk. It turns potential disasters into smart investments. In tech M&A, what you see isn’t always what you get—so always dig deeper.

Related Resources

You might also find these related articles helpful:

• How to Write a Technical Book on Coin Grading and Authentication: A Published Author’s Guide – Writing a Technical Book is Your Ticket to Becoming the Go-To Expert Want to cement your reputation as the authority on …
• How I Turned My Expertise in Coin Grading and AT Detection into a $50K Passive Income Online Course – Sharing what you know can be a fantastic way to earn income. Here’s how I turned my experience in coin grading and artif…
• How Specializing in Detecting ‘AT or NO’ Tech Risks Can Skyrocket Your Consulting Rate to $200+/hr – Want to earn top rates as a consultant? Focus on solving expensive problems. Let me share how specializing in detecting …