A security assessment is a systematic evaluation of a company’s systems, architecture, and processes to identify vulnerabilities and ensure compliance with security best practices. In technical due diligence, it’s a non-negotiable checkpoint for investors and acquirers looking to avoid post-deal breaches, penalties, or data loss.

A security assessment involves analyzing the technical and organizational measures put in place to protect data, applications, and infrastructure. It can be preventive (design review), detective (vulnerability scanning), or reactive (incident history review).

Core components include:

• Access control: Identity, role-based permissions, MFA
• Infrastructure security: Network segmentation, encryption, firewall configurations
• Application security: Input validation, authentication flows, OWASP compliance
• Data protection: GDPR/CCPA/SOC2 adherence, data lifecycle management
• Incident response: Processes and tooling for detection, logging, and mitigation

In a due diligence context, the goal is to detect material risks—legal, technical, or reputational—before they are inherited.

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Security assessments are critical because they protect the deal. A single overlooked vulnerability or non-compliance can lead to:

• Regulatory fines: Especially under GDPR, HIPAA, or SOC2 frameworks
• Loss of customer trust: Breaches can harm brand and growth prospects
• Delayed integration: Acquirers often pause transitions over security gaps
• Hidden liabilities: Old exposures or tech debt can surface post-acquisition
• Insurance impact: Poor posture may invalidate cyber policies

For investors, strong security posture boosts confidence and valuation. For acquirers, it limits operational and legal exposure.

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