Ask HN: Technical/Code Validation as part of an investment round.

1 points by edowling 13 years ago | 2 comments

Hi all,

My startup is actively pursuing seed investment, and I was wondering about technical/code validation as part of due diligence. Is it standard practice for code to be examined by a third party prior to investment being made? I would imagine in biotech, green tech, clean tech, etc that it would be fairly standard to get the core technology validated by independent experts. But is this normal for a strictly software startup? If placed in this position, what sort of protections should be put in place to protect both parties?

goshon 13 years ago |

The technical validation is being done at the architecture level usually, and the due diligence is usually focused on the background and tech skills of the entrepreneurs.

rabidsnail 13 years ago |

My understanding is that it's standard for acquisitions but not for funding rounds.