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

Investor data rooms are secure virtual spaces that companies utilize to share sensitive data with buyers and advisors during due diligence phases of M&A deals. These rooms are usually monitored and secured to ensure that the information is safe and does not get into the wrong hands. The best virtual data room providers offer checklists of due diligence ready-to-use to help streamline the collection process and ensure that all pertinent documents are collected with care.

The documents you need to include in your data room can vary according to your specific situation and the transaction. However, there are a few documents that 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 that breaks down 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 are serious about investor communication and transparency.

Financial Information This includes historical financial statements as well as projected financial statements and the assumptions, sources and the reasoning behind these projections. Founders may include their business plan and product roadmap here.

Founders can decide to separate the investor data room and limit access by assigning different users roles. For instance, one section can contain strategy documents and pitch decks that are available to early stage investors, whereas the other section will include more detailed legal documents for investors who are more serious. This lets them reduce time and effort by sharing only the documents they require, and provides them with greater control over the documents shared.