SaaS due diligence report: 12 learnings for founders that want to secure their next funding round

At madewithlove, our approach to startup due diligence (or audits) goes beyond just scanning lines of code. We look at the bigger picture—the team, processes, culture, and product strategy—because building a successful startup involves so much more than just solid technical foundations. Here are 12 key insights we’ve gathered from auditing over 140 SaaS startups in the past 5 years, along with lessons that can help founders make better decisions to secure their next funding round.

Here goes.

1. Communication is key, but it's often overlooked

Communication is like the duct tape of a startup: it holds everything together. One of the most common challenges we find when auditing a SaaS startup is a lack of effective knowledge-sharing and communication within engineering teams. Teams that favour an individual working style often struggle to collaborate efficiently. Encouraging more deliberate collaboration, like pair programming, can vastly improve communication and spread knowledge across the team.

It’s not just about engineering. If the product management team doesn’t align with development, chaos is inevitable. Are your engineers motivated, or are they perpetually putting out fires? These aren’t questions answered by looking at the code—they’re answered by talking to humans.

Lesson: Build structures that facilitate regular and open communication, even if your team works independently most of the time. Remember, nobody can read minds, not even your best engineer. Installing Core Protocols can help foster a culture of effective communication.

2. Documentation is a superpower

Good documentation is the secret sauce to scalability. In our due diligence audits, we see startups relying too much on in-person knowledge sharing. Sure, it's nice to explain things over a coffee, but it quickly becomes a bottleneck as teams grow. Without solid documentation, your new hires will spend more time guessing passwords than building products. Comprehensive documentation—from onboarding guides to coding standards—can make scaling smoother.

Lesson: Start early with documentation and treat it as an investment in your startup's future scalability. Documentation is crucial for a remote team to thrive—everyone must contribute to keep it accurate, up-to-date, and well-organised. Unmaintained documentation is as bad as no documentation at all. When you lack documentation, growth slows, and confusion takes over. Make it a priority, and your team will thank you.

3. Leaders set the tone

Leadership impacts every facet of a company. We often see signs of micromanagement or a lack of peer challenges, which stifle creativity and growth. A strong leadership team should encourage autonomy while providing a clear vision. No one likes a leader who hovers like a helicopter, one who thinks they are the smartest person in the room or one who’s as absent as a unicorn.

A lack of leadership bottlenecks can lead to an unsustainable pace of work, which in turn burns everyone out. It’s like trying to ride a bicycle with square wheels—you’ll get there eventually, but everyone is exhausted by the time you arrive.

Lesson: As a leader, focus on enabling your team and let them take ownership. It leads to more innovation and higher morale. Give them the tools, the vision, and then step back—like a maestro guiding a symphony, not playing every instrument.

Curious about avoiding leadership pitfalls? Check out these common leadership mistakes that can break your startup.

4. Scaling needs more than just technology

Most teams are not ready to scale—not because of technical limitations but because of inadequate onboarding processes and insufficient senior leadership roles. Scaling isn’t just about hiring more engineers; it’s about having the right systems to support growth. It's the difference between growing a well-tended garden and letting weeds take over.

Beyond the tech stack, startups need a motivated, aligned team to handle the pressures of growth. Scalability is not just about the ability to serve millions of requests—it's about whether your culture, processes, and team are ready to grow.

Lesson: Formalise your onboarding processes and ensure you have experienced leaders who can mentor and guide the team. If scaling feels like chaos, you’re probably missing some key systems.

5. Technical debt is not always bad, but it should be managed Marie-Kondo style

Many startups are highly feature-focused, leading them to accumulate technical debt. While some shortcuts are necessary in the early stages, ignoring technical debt means it piles up and can quickly spiral out of control. Allocating specific time to tackle technical debt is essential for long-term success.

Lesson: Create a balance between building new features and reducing technical debt and system improvement. Think of it as Marie Kondo-ing your codebase.

Learn how to manage technical debt effectively by reading our technical debt guide.

6. Testing is not a luxury—it's a necessity

Automated testing is often lacking in the startups we audit, resulting in manual and error-prone QA processes. Imagine releasing new features without testing—it's like jumping out of a plane and figuring out how the parachute works on the way down. Implementing unit tests, integration tests, and automated quality checks can prevent regressions and improve product reliability.

Lesson: Invest in automated testing early. It may seem like extra effort, but it saves you from bigger issues late down the road. Testing doesn’t slow you down—it’s like checking if the bridge works before driving over it.

7. Feedback can be a superpower and drives improvement

High-performing teams thrive on structured feedback and regular retrospectives. Many startups skip regular one-on-ones due to time constraints, which ultimately leads to a disconnect between leadership and team members. Feedback shouldn’t be a biannual review that everyone dreads; it should be part of the rhythm of your work.

Lesson: Make time for regular feedback sessions. It’s a small investment that pays off in team alignment and motivation.

For insights on how feedback can be a superpower, have a look at our article on retrospectives.

8. Dependencies need careful management

Managing external dependencies effectively is crucial for keeping your startup's growth on track. For non-techies, dependencies are third-party tools or services that your product relies on, such as payment gateways, analytics, or cloud services. When these dependencies aren't managed well, they can create unexpected costs, slowdowns, or even downtime. Careful management means understanding who you're relying on and making sure they're stable enough to support your growth., especially in terms of cost and scalability. Poorly managed dependencies can lead to hidden costs and technical hurdles during growth phases.

Lesson: Map out and review your dependencies regularly to ensure you are not setting yourself up for surprises later. An unplanned outage because of an expired third-party API key isn't exactly the kind of surprise you want.

9. Avoid knowledge silos

We often see key individuals holding concentrated knowledge about specific parts of the system, which can be risky. This is known as the “bus factor”—what happens to your engineering team if that one key person wins the lottery and decides to buy a llama farm in Patagonia?

Lesson: Encourage pair programming, cross-training, and comprehensive documentation to distribute knowledge across the team. Reduce single points of failure; your startup shouldn't depend on the heroics of one person.

10. A CTO is not a product manager

Many early-stage startups have CTOs who double as product managers, which splits focus and limits the ability to develop a long-term technical vision. Your CTO shouldn’t be juggling user stories while trying to architect the next major release.

Lesson: As you grow, consider separating product management from technical leadership to allow each to focus deeply on their respective areas. Your CTO should think about scalable infrastructure, not whether the new UI button should be blue or green.

If your startup is struggling with this balance, read more about what makes a successful CTO.

11. AI on the long-term roadmap? Clarity is key

We've seen quite a few companies adding AI to their long-term roadmaps. It sounds exciting, but more often than not, these plans lack clarity on how AI will actually be implemented. Having an AI goal is great, but without a clear strategy and context in your product roadmap, it's just another buzzword that sounds good in pitch meetings.

Lesson: If you're putting AI on your roadmap, make sure you have a realistic plan, including the resources, talent, and steps needed to achieve it. Investors will want to see that you're not just chasing trends but have a grounded approach.

Think of us as the Gordon Ramsay of startup audits—direct, honest, and occasionally a little spicy. We’re here to ensure that by the time you go for your next funding round, you're well-prepared, and your tech (and team) are ready to shine.

12. Roadmaps—Is yours realistic?

Another area often overlooked in these insights is the roadmap. Investors frequently ask us whether a startup's roadmap is realistic, and too often, we have to answer no. A roadmap filled with ambitious timelines might look impressive, but without a solid foundation, it's a recipe for missed deadlines and frustrated stakeholders.

Lesson: Be honest and practical with your roadmap. Make sure it aligns with your team's capabilities and bandwidth. Investors prefer achievable goals over flashy but unrealistic ones. Learn how to communicate your roadmap to investors properly.

The madewithlove difference

Our due diligence audit process doesn’t just focus on the codebase. We dive into team dynamics, leadership, scalability, technical debt, and processes—covering all the aspects that can impact a startup’s growth. We love to get our hands dirty and provide real, honest feedback to help startups thrive.

Think of us as the Gordon Ramsay of startup audits—direct, honest, and occasionally a little spicy. We’re here to ensure that by the time you go for your next funding round, you're well-prepared, and your tech (and team) are ready to shine.

If you're preparing for a funding round or want to ensure your startup is ready to scale, our due diligence audits can give you the clarity you need. We’re here to provide honest, insightful feedback—because we believe that’s what real love looks like.