How to Create a Data Room for Your Business

Often, the process of selling a company requires that sensitive documents and data be shared among multiple buyers. Virtual data rooms are the perfect solution for anyone planning to sell their business or requires a secure way to share sensitive information. A data room (also known as a virtual dataroom to facilitate due diligence) provides the control and distribution you need to complete your transaction.

Investor data requests are made throughout the deal flow process but they tend to happen in two stages. Stage 1 data is required to create a Term Sheet (e.g. market fit for the product, financial models Cap Table).

Stage 2 detailed due diligence data requests (e.g. security-related documents, material agreements and more).

When creating a data room make sure to keep in mind that investors want quick and easy access to the data and documents. To achieve this, you should consider having a comprehensive list of required documents and a logical structure to make it easier for investors to find what they’re looking for. This can be accomplished by using folders, metadata and the use of a consistent naming convention to documents.

Another recommendation is to avoid sharing the results of your studies in a sporadic and inconsistent manner in the dataroom. This could new post here be confusing for investors and show an inability to comprehend your business. Make sure to include only the information that is relevant to your business, and eliminate documents that are no longer valid. This will save time and ensure that all parties have access to the most up-to-date and accurate information.

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