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

Investor data rooms are secure virtual spaces that businesses utilize to share sensitive data with buyers and advisors during due diligence of M&A deals. These rooms are typically monitored and secured to ensure that confidential information does not get into the wrong hands. The most reliable virtual data rooms offer due diligence checklists that can be used to streamline the process of collecting documents and ensure they are collected carefully.

Documents that you should include in your data room may differ according to your specific situation and the transaction. However, there are a few documents that are essential 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 lists ownership stakes and percentages of your company. Founders may choose to include previous updates to investors to show investors that they take serious the importance of transparency and communication for investors.

Financial Information: This includes historical financial statements, projected financial statements, and the assumptions, sources and logic behind these projections. Founders may include a roadmap for their product and business plan.

Founders can decide to separate the investor data room and limit access by assigning different users roles. For example one section could include strategy documents and presentation decks for early stage investors, while the other section would contain more detailed legal documents targeted at more serious investors. This lets them reduce time and effort by sharing only documents they require, and provides them with greater control over the sensitive information that is shared.

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