The verdict in three sentences
A technical due diligence costs, as a 2026 estimate, 5,000 to 20,000 EUR (about 5,500 to 22,000 USD) and runs 2 to 4 weeks, usually under 1 % of the purchase price. It examines architecture, technical debt, security, open source licenses and key person dependency, the five areas where bad surprises hide. A buyer who commissions one is not trying to kill the deal: they want hard numbers to adjust the price, the indemnities or the earn-out.
Why the financial audit is not enough
The accountants check recurring revenue, margins and working capital. They will not tell you the application runs on a framework version abandoned three years ago, that 40 % of the code has no tests, or that the founder is the only person who can deploy to production. Each of these facts has a cost: a forced rewrite within 24 months, a breach at a customer, a team that cannot ship once the founder leaves.
The technical audit answers one question: how much must be spent, and how soon, for this software to keep generating the revenue that justifies the price? The deliverable is a 20 to 40 page report, a risk map scored 1 to 4 and a costed remediation estimate.
Scope and price of an audit
| Scope | Content | Duration | 2026 range |
|---|---|---|---|
| Flash audit | Interviews, architecture review, dependency scan | 1 to 2 weeks | 5,000 to 8,000 EUR |
| Standard audit | Flash + sampled code review, tests, deployment | 2 to 3 weeks | 8,000 to 14,000 EUR |
| Deep audit | Standard + penetration test, GDPR or SOC 2 readiness, scalability | 3 to 4 weeks | 14,000 to 20,000 EUR |
| Open source licenses only | Component inventory, copyleft exposure | 3 to 5 days | 2,000 to 4,000 EUR |
| Post-closing review | 100-day remediation plan | 1 week | 3,000 to 6,000 EUR |
The auditor needs read access to the code repository, hosting and ticketing tool, plus 4 to 6 hours of interviews with the tech team, all under NDA. If the seller refuses code access, that is the first red flag.
Red flags and their price impact
| Red flag | How it is detected | Typical deal impact |
|---|---|---|
| Single key person (founder or lone dev) | Commit history, interviews | Retention clause 12 to 24 months, earn-out tied to handover |
| End-of-life framework or language | Version inventory | Price cut equal to migration cost, often 50,000 to 300,000 EUR |
| Test coverage under 20 % | Coverage tool report | Stabilization provision, 5 to 10 % of price |
| Unpatched critical vulnerabilities | Security scan, pen test | Fix before closing or escrow |
| Copyleft license (AGPL type) inside the product | License inventory | Specific indemnity or component replacement |
| Undocumented hosting, untested backups | Infrastructure review | Recovery plan required before signing |
| Personal data without GDPR records | Interviews, processing review | Extended indemnities |
The most common red flag in small software companies is the key person. When over 70 % of the last 12 months of changes come from one person, the risk is real. You do not handle it by cutting the price at random: you handle it with a transition agreement, documentation and a staged earn-out.
Kolonell runs these audits for acquirers, funds and executives, and can then deliver the remediation. If the target is an early-stage SaaS, our article on vertical SaaS launch costs gives cost benchmarks to compare against.
Mini case study
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Daniel, a search fund investor in Boston, negotiates the purchase of a practice management software vendor for architecture firms: 1,300,000 USD of annual recurring revenue, asking price 3,900,000 USD. The standard audit, 13,000 USD over 3 weeks, finds three issues: the founder wrote 85 % of the code, the app runs on a framework version unsupported since 2024, and test coverage is 12 %. Migration is estimated at 195,000 USD, stabilization at 65,000 USD. Daniel gets a 160,000 USD price reduction, a 215,000 USD earn-out tied to the founder staying 18 months, and a specific license indemnity. For 13,000 USD of audit, he protects about 375,000 USD of value, a ratio of 1 to 29.
FAQ
How much does tech due diligence cost in 2026?
Between 5,000 and 20,000 EUR depending on scope, from a one-week flash audit to a deep audit with penetration testing. For a deal above 1,000,000, that is usually under 1 % of the price.
How long does it take?
2 to 4 weeks once code access and interviews are open. Build it into the LOI timeline so it does not delay closing.
What if the founder is the only one who knows the code?
Plan a 12 to 24 month retention clause, a documentation plan and an earn-out tied to handover. Hiring a senior developer during the transition is often required.
Can open source licenses block a deal?
Rarely, but an AGPL component embedded in the product can force code publication or a replacement. A license inventory costs 2,000 to 4,000 EUR and settles the question.
Can the seller refuse code access?
They can offer a secure data room or a neutral third-party auditor under NDA. A flat refusal should make you reconsider or demand heavy indemnities.
Let's scope your project. Share the target, its known tech stack and your closing timeline, and we will scope an audit delivered in 2 to 4 weeks. Detailed quote within 48 h. WhatsApp +221 77 596 93 33.
Mohamed Bah
Fondateur, Kolonell
Passionate about digital and entrepreneurship in Africa, Mohamed has been helping Sénégalese businesses with their digital transformation since 2020. Founder of Kolonell, he believes every SME deserves a professional and accessible online présence.
