We have similar stories... A possible investor (a supplier for our product) went through a Due Diligence with us to learn more about our process etc. Couple of weeks later our founder got the no plus a note that they would not sell their product to us anymore, since they were planning on persuing service similar to ours within their own company.

A couple months later our founder has another possible investor and we go through a Due Diligence again. This time we were already wary from our first DD (plus the investor had a bit of a reputation of being a scammer in the past) and lo and behold their IT guy wants to have full access to our software packages / pipeline, source code and databases, so they "can assess the quality". (...) I didn't end up giving them any of our source code, which they were fine with after a while. This whole spiel went on for another month where they "focused" more on other processes. Eventually they went quiet and their CTO asked me privately if I wanted to jump ship to join them, because they need someone with my expertise...

Does this happen often or did we just have some bad luck? Also has anyone ever been asked to provide the source code to their product? (that seemed kind of outrageous to me)