During the due diligence process of M&A transactions, companies provide sensitive information to advisors and buyers in secure virtual spaces called investor data rooms. These rooms are typically protected and monitored constantly to ensure that the information within them does not fall into the in the wrong hands. Top providers of virtual data rooms offer ready-to-use due diligence checklists to help streamline the collection process and ensure that all pertinent documents are collected with care.
Documents that you need to include in your investor data room could depend on the particular situation and transaction, but certain documents are essential for every data room:
Legal Information: This consists of articles incorporating, intellectual property registrations, as well as employee stock agreements. Also included is the cap table which lists ownership stakes as well as percentages of your company. The founders can also decide to include any previous investor updates, which shows investors that they care about investor communication and transparency.
Financial Information This includes historical and projected financial statements and explains assumptions, sources and the rationale behind those projections. Founders may include their business plan as well as a product roadmap here as well.
Founders may choose to divide the investor data room and limit access by assigning different users roles. For instance one section could have strategy documents and presentation decks for early stage investors while the other section will include more detailed legal documents that are targeted towards more serious investors. This lets them save time by only sharing the documents they require and allows them to control the information that is shared.