M&A Due Diligence Checklist – Important Documents to Include in Your Investor Data Room

During the due www.floridavdr.com/top-virtual-data-room-providers-in-india/ diligence phase of M&A transactions, companies provide sensitive information to buyers and advisors through secure virtual spaces known as investor data rooms. These rooms are usually secured and continuously monitored to ensure that the information they store doesn’t fall into improper hands. The best virtual data room providers provide due diligence checklists that can be used to make the collection process easier and ensure that all relevant documents are carefully gathered.

Documents to be included in your investor data room may differ depending on the circumstances and transaction, but a few core documents are required for every data room:

Legal Information This includes articles of incorporation as well as intellectual property registrations and employee stock agreements. It also includes the cap table which breaks down ownership stakes as well as percentages of your company. Founders can include previous updates to investors which can convince investors that they have taken investor communication and transparency seriously.

Financial Information This includes both the financial statements of the past and the future and explains assumptions, sources and the reasoning behind these projections. Founders can also include their business plan as well as a product roadmap here as well.

Founders could decide to divide the investor data room, and limit access by assigning different users roles. For example, a section may contain strategy documents and pitch decks that will be accessible to investors at the beginning of their journey, while the other section will have more detailed legal documents for investors with more serious intentions. This lets them save valuable time by sharing only the documents they require, and provides them with greater control over the sensitive information shared.