Technical Due Diligence

Technical Due Diligence is a structured evaluation of the technical and operational capacity of technology companies, software houses, IT consultancies and engineering teams.

While traditional due diligence usually focuses on financial, legal and tax aspects, technical due diligence aims to identify invisible risks related to the people who sustain operations.

The same framework supports majority acquisitions (classic M&A) as well as minority investment rounds, follow-ons and valuation processes, where the investor needs to understand the team's real execution capacity before deploying capital.

Grilo turns technical human capital into auditable evidence to support investment, acquisition, merger or integration decisions.

Many companies carry operational risks that do not appear on the financial statement.

Among the main invisible risks are:

• Inflated seniorities
• Technically fragile teams
• Excessive dependency on specific professionals
• Low scalability capacity
• Hidden operational bottlenecks
• Misalignment between role and actual execution capacity
• Future need for technical restructuring

Technical Due Diligence helps investors and buyers understand whether the operation actually supports the stated valuation.

Traditional Due Diligence usually analyzes:

• Financial
• Legal
• Tax
• Fiscal
• Accounting

Technical Due Diligence adds an operational layer focused on the team's actual execution capacity.

It helps answer questions like:

• Does the team support expected growth?
• Are seniorities real?
• Is there excessive dependency on key people?
• Is the technical level compatible with the operation?
• Will restructuring be needed after the acquisition?

In technology companies, a large part of the value is concentrated in the team's execution capacity.

Without proper validation, investors may take on risks such as:

• Operational delays
• Low delivery capacity
• Critical dependency on professionals
• Need for emergency hiring
• Post-acquisition restructuring
• Productivity loss
• Integration difficulty

Technical diligence helps reduce uncertainty before the transaction.

Many decisions in technology still rely on subjective perception.

Grilo's methodology seeks to turn scattered signals, resumes, interviews and practical execution into structured and comparable evidence.

This enables more consistent, auditable and data-driven decisions.

Auditable evidence means turning subjective perceptions into structured, documented and traceable criteria.

This enables:

• Comparability
• Transparency
• Standardization
• Greater analytical consistency
• Executive support for decision-making

Grilo's methodology is structured in five stages:

1. Operational Structure Mapping
2. Public Technical Score
3. Structured Interview
4. Practical Technical Validation
5. Analytical Consolidation and Executive Report

Each stage adds a new layer of evidence to reduce subjectivity and increase confidence in the diagnosis.

Grilo evaluates:

• Operational structure
• Internal seniorities
• Compatibility between role and technical capacity
• Technical quality of professionals
• Declared technology stack
• Professional background
• Public technical evidence
• Problem-solving capacity
• Code quality
• Team execution capacity
• Dependency on specific talent
• Operational risk by area
• Organizational technical risk

The Public Technical Score is one of the layers of Grilo's methodology.

In this stage, public evidence about the professional is analyzed, such as:

• LinkedIn profile
• Professional background
• Declared technology stack
• Certifications
• Education
• Explicit and inferred evidence

The goal is to measure the initial adherence between the role held and the public signals of technical capacity.

The Jump Score is an indicator used by Grilo to estimate the probability of a professional being open to the market or seeking new opportunities.

This indicator helps investors and buyers understand potential post-acquisition retention risks.

Grilo's structured interview follows standardized criteria customized for each professional.

The evaluation considers:

• Role
• Seniority
• Job Description
• Problem-solving capacity
• Gaps identified in the Public Technical Score

The process uses dual validation:

• Live human evaluator
• Subsequent AI-based evaluation from the transcript

When there are relevant divergences between evaluations, a manual review takes place.

Practical technical validation measures whether the observed execution capacity is compatible with the declared seniority.

For engineering profiles, the analysis may include:

• Public code on GitHub
• Project structure
• Code organization
• Architectural patterns
• Readability
• Best practices
• Technical complexity
• Maintainability

For other profiles, technical questionnaires may be used with:

• Practical scenarios
• Case studies
• Open questions

Yes.

The methodology was structured to reduce subjectivity and individual bias through:

• Standardized criteria
• Independent evaluation layers
• Practical evidence
• Dual validation
• Analytical consolidation
• Inconsistency review

Organizational technical risk is identified through the convergence of:

• Public evidence
• Structured interviews
• Practical technical validation
• Operational structure
• Seniority distribution
• Dependency on specific professionals
• Performance by area
• Consistency between role and actual capacity

The greater the convergence between layers, the higher the confidence in the diagnosis.

No.

Although there is a deep validation layer for engineering and software development profiles, the methodology can also be applied to other technical and strategic roles.

For engineering profiles, the analysis may include:

• GitHub
• Code quality
• Architectural structure
• Best practices
• Repository organization
• Detected seniority

For other roles, the evaluation may include:

• Technical questionnaires
• Practical scenarios
• Open questions
• Structured interviews
• Operational capacity assessment

It applies both to acquisition processes (M&A) and to minority investments and valuation validation.

Technical Due Diligence is especially relevant for:

• Investment funds
• Venture Capital
• Private Equity
• Companies in acquisition processes
• Technology holdings
• Strategic consultancies
• Software houses
• SaaS companies
• Growing technology companies
• Operations intensive in technical human capital

No.

The methodology can be applied to different technology-intensive operating models, including:

• SaaS companies
• IT consultancies
• Fintechs
• Healthtechs
• Edtechs
• Startups
• Internal technology teams
• Digital platforms
• Companies with relevant software engineering

No.

The methodology can be applied to national and international operations, especially in companies with distributed technology teams.

Yes. Beyond Technical Due Diligence, the framework can also be applied internally, including:

• Organizational technical diagnosis
• Restructurings
• Operational expansion
• Evaluation of technical areas
• Internal audits
• Operational risk management
• Talent mapping
• Growth planning

The evaluation may involve:

• Technical leaders
• Technical developers
• Software engineers
• Managers
• Non-developer technical specialists
• Strategic professionals
• Critical operation areas

Composition depends on the diligence's goal.

No.

Grilo's focus is on evaluating technical human capital and the operational capacity of the people who sustain the company's execution.

Our methodology seeks to identify whether the seniority, knowledge and practical capacity of professionals are compatible with the roles they hold, generating evidence about risks related to technical human capital.

Aspects such as infrastructure, systems architecture, internal processes, information security, compliance, IT governance or adherence to standards and certifications are not part of the standard scope of Grilo's Technical Due Diligence and should be evaluated by specialists or complementary diligences when necessary.

Yes.

Artificial intelligence is used as a complementary layer for analysis and standardization.

AI helps with:

• Reading technical evidence
• Transcript analysis
• Identifying inconsistencies
• Analytical consolidation
• Criteria standardization
• Reducing individual bias

Evaluations can undergo human review whenever necessary.

No.

Grilo's methodology combines human analysis and artificial intelligence.

The goal is not to replace specialists, but to increase consistency, scalability and analytical capacity.

Currently the evaluation can be performed using public code, but not the code of the company being targeted by the Due Diligence.

Analyzing private repositories is technically viable, but each challenge we generate for technical developers is unique and analyzes present delivery capacity rather than past code commits.

Instead of looking in the rearview mirror, we look at today, generating evidence that more closely reflects the team's current operational capacity.

At the end of the diligence, Grilo delivers a consolidated executive report with:

• Global score
• Executive view
• View by area
• View by role
• View by seniority
• Operational insights
• Risk identification
• Performance evidence
• Organizational technical diagnosis
• Possible bottlenecks
• Critical retention points
• Individual evaluation appendices

Yes.

The report was structured to support:

• Acquisition decisions
• Valuation validation
• Risk management
• Integration strategies
• Post-acquisition planning
• Operational restructuring
• Identification of critical areas

However, the decision to proceed with, adjust or interrupt an M&A or investment operation is the sole responsibility of the contracting party, who should combine the technical findings with other analyses (financial, legal, tax, strategic) deemed pertinent.

Yes.

One of the main goals of the methodology is to identify discrepancies between:

• Declared seniority
• Observed practical capacity
• Delivered technical complexity
• Expected level for the role

Grilo helps investors and buyers identify:

• Operational fragilities
• Dependency on key professionals
• Technical inconsistencies
• Seniority gaps
• Retention risks
• Low scalability
• Future restructuring needs

The goal is to reduce uncertainty before the transaction is concluded and to reduce information asymmetry and risks related to technical human capital. However, our analysis does not, in isolation, constitute an investment recommendation, a guarantee of future performance of the analyzed team or an assessment of the professionals' behavioral profile.

Yes.

The insights produced by the diligence can support:

• Integration strategies
• Critical talent retention
• Team reorganization
• Prioritization of sensitive areas
• Operational planning
• Post-deal risk mitigation

No.

Grilo's proposition is to complement traditional diligence by adding a technical and operational layer focused on human capital and actual execution capacity.

Grilo combines:

• Practical technical evaluation
• Analytical structure
• Artificial intelligence
• Organizational reading
• Operational capacity
• Seniority validation
• Auditable technical evidence

The goal is not just to interview people, but to turn technical capacity into executive intelligence for decision-making.

The process usually starts with:

• Understanding the operation's context
• Scope definition
• Mapping eligible areas
• Sharing initial information
• Defining the evaluation rubric

After that, Grilo structures the operational plan of the diligence.

Timing varies depending on:

• Number of professionals
• Operation complexity
• Desired depth
• Information availability
• Evaluation scope

Smaller projects can be executed in a few days, while larger operations may require a few weeks.

Grilo brings together professionals with experience in:

• Technology
• Human Resources
• Talent Acquisition
• Organizational management
• Technical recruiting
• Artificial intelligence
• Complex projects
• Corporate operations
• Team structuring

The framework combines technical, operational and strategic vision.

You can access:

• https://grilo.capital
• Grilo on LinkedIn
• Institutional materials
• Executive presentations
• Content about Technical Due Diligence for M&A