Selling a business often requires sharing sensitive data and documents with many buyers. Whether you are looking to sell your business or simply require sharing sensitive information in a safe manner, a virtual room is the best solution. A data room (also known as a virtual dataroom for due diligence) provides the control and distribution you need to complete your transaction.
Investor data requests come in throughout the entire deal flow process but tend to occur in two stages the first stage is data needed to create a term sheet (e.g., financial models, product-market fit and cap table).
Stage 2 detailed due diligence requests (e.g. security-related documents materials agreements and more).
When creating a room for data make sure to keep in mind that investors are looking for quick and easy access to the data and documents. You should consider including a comprehensive document listing and a clear structure to aid investors in finding the documents they require. One method to accomplish this is to utilize folders, metadata and a consistent document naming convention.
Another tip is to avoid sharing a fragmented or unconventional analyses in the data room. This can confuse investors and show that you are not knowledgeable about your business. Also, be careful to include only the information that will benefit your business. You should also eliminate any docs that are no more relevant. This will help save time and ensure all parties have access to the most current and accurate information.