Investor data rooms are secure virtual spaces that companies use to share sensitive information with buyers and advisors during due diligence phases of M&A deals. These rooms are typically monitored and secured to ensure that confidential information does not be accessed by unauthorized parties. The top providers of virtual data rooms offer ready-to-use due diligence checklists to make the collection process easier and ensure that all pertinent documents are gathered with care.

Documents you need to include in your data room will differ depending on the circumstances of the transaction. However, there are a few documents that are essential for every data room:

Legal Information It includes articles of incorporation and intellectual property registrations and employee stock agreements. The cap table is included, which breaks down ownership percentages and stakes in your business. Founders are able to include past updates to investors, which helps demonstrate to investors that they value 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 the reasoning behind these projections. Founders can also include their business plan as well as a product roadmap here as well.

Founders have the option of breaking the investor data space into sections, and limit access to different users roles. For instance, one section can contain strategy documents and pitch decks that will be available to investors at the beginning of their journey, while the other section will have more detailed legal documentation for more serious investors. This lets them save time by only sharing documents that they need, and gives them more control over the documents shared.

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