We have shipped a SaaS product to the market very recently and one of our bigger customers have shown interest in investing in our company. They have requested a "code review" to evaluate if the product can scale easily. What's your thought on this? Is this a standard procedure before investing in a software company? If so, how can we do so without endangering our IP?
Not standard, I have personally experienced it once as "spectator." The investor was savvy enough to understand the build, and wanted to ensure the proprietary "algorithms" were actually there as proposed as part of the value being bought into.
Most investors focus on the team and their resourcefulness not the product alone, in code the product is often the code and although I think it should be more common, I don't think it is... mainly, I think is because most investors (I'm assuming") don't care for the code part or understand it anyway.