Fundraising is one of the most distracting periods for a CEO â and often the worst possible time for engineering velocity to drop. Meanwhile, technical due diligence has become more thorough, and investors are scrutinising engineering team structure more than ever. Here's how to navigate it.
What Investors Look at in Technical Diligence
Modern technical diligence goes well beyond "does the product work." Sophisticated investors (Series A and above) typically review:
- Team composition: Who are the permanent engineers? How are they structured? What's the contract vs permanent split?
- Architecture quality: Is the product scalable? Is there significant technical debt? What are the key technical risks?
- Velocity: What has the team shipped in the last 6 months? What's the sprint throughput?
- Headcount efficiency: Revenue or ARR per engineer. Teams that can point to a contract engineering model typically have better metrics here.
How to Present Staff Augmentation Positively
Some CEOs are nervous about disclosing contract engineering. They shouldn't be. The investor-friendly framing: "We run a permanent core team of [X] engineers supplemented by a contract layer that we scale based on roadmap intensity. This gives us 40% better headcount efficiency vs comparable companies and full flexibility to scale as we grow into our Series B milestones."
Investors who understand unit economics will respect this framing. Those who don't understand it can be educated.
Keeping Engineering Velocity During a Fundraise
- Shield your CTO from the fundraise as much as possible â they should be building, not pitching
- Lock the roadmap for the fundraise period â no new initiatives, just execution
- Use contract engineers to maintain velocity while the CEO/CTO's bandwidth is reduced
- Define "proof points" for the raise â specific technical milestones that close before the round
Maintain Velocity Through Your Fundraise
Contract engineers who can start in 72 hours. No distraction from your permanent team.
Get Profiles →- → CEO's Guide to Scaling Without Headcount
- → CEO's Guide to Staff Augmentation ROI
- → Staff Augmentation for Startups