M&A Due Diligence Checklist – Important Documents to Include in Your Investor Data Room
In the due diligence process of M&A transactions, companies share sensitive information with advisors and buyers through secure virtual spaces known as investor data rooms. These rooms are usually monitored and secured to ensure that sensitive information doesn’t get into the wrong hands. The top providers of virtual data rooms provide due diligence checklists that can be used to streamline the collection process and ensure that all pertinent documents are carefully gathered.
Documents to include in your investor data room could vary depending on the situation and transaction, but a few core documents are critical for every data room:
Legal Information: This consists of documents that incorporate intellectual property registrations, as well as employee stock agreements. The cap table is included, which lists ownership percentages and stakes in your business. Founders are able to include old investor updates as well to convince investors that they have taken serious the importance of transparency and communication for investors.
Financial Information This includes historical financial statements as well as projected financial statements and the assumptions, sources and reasoning behind these projections. Founders might include their product roadmap and business plan.
Founders can choose to break the investor data space into sections and limit access to certain users by granting different roles. For instance, one section could contain strategy documents and presentation decks for early stage https://floridavdr.com/top-virtual-data-room-providers-in-india/ investors and the other would contain more detailed legal documents targeted at more serious investors. This allows them to save time by only sharing the documents they require and gives them more control over the information that is shared.