What is Technical Due Diligence?
Technical Due Diligence (TDD): A critical audit phase during startup funding (Series A+) or acquisition. In the AI era, TDD has evolved to specifically hunt for Synthetic Debt, security vulnerabilities in AI code, and the "IP Vacuum" caused by unsupervised generation.
The AI-Era Audit
Modern auditors now use AI-powered scanners to detect:
- Opaque Code: Modules that lack human design logic.
- IP Risk: Logic that was likely generated by a single prompt and lacks copyright protection.
- Security Fragility: Patterns that match known insecure AI training data.
Why Projects Fail the Audit
73%
of Sarah's code had no IP protection
Source: Prologue
$250,000
Estimated remediation cost for AI debt
Source: Prologue
40%
Chance of project recovery after audit
Source: Prologue
A codebase that "works" but is filled with Comprehension Debt is a liability, not an asset. If the auditors determine that the cost to understand and maintain the code exceeds its value, they will recommend slashing the valuation or withdrawing the investment.
How to Prepare
The Clean Vibe methodology makes your project "Audit-Ready" from day one:
- Human Authorship: Proving creative input through ADRs and design prompts.
- Debt Tracking: Showing that you are aware of your shortcuts via a Debt Ledger.
- Security Rigor: Regular scans and expert reviews of AI-generated auth/crypto code.
Related Terms
- Synthetic Debt: What the auditors are looking for.
- IP Debt: The most common reason for audit failure.
- Failed Due Diligence: The business problem.
Book Reference
- Prologue: The story of Sarah's failed audit.
- Chapter 10: The Audit — a full simulation of the modern TDD process.
- Chapter 11: Can You Patent This? — the legal compliance chapter.