Selling a business usually requires sharing sensitive documents and data with many buyers. Virtual data rooms are the ideal solution for those looking to sell their business, or who wants to securely share sensitive information. A data room, also referred to as due diligence virtual dataroom, provides the secure distribution and control that you require to conduct your transaction.
Data requests from investors are received throughout the entire deal flow process but tend to occur in two phases one stage: Stage 1 data required to create an outline of terms (e.g., financial models, product-market fit and cap table).
Stage 2 detailed due diligence requests (e.g. security-related documents as well as material agreements and more).
When creating a room for data, be aware that investors will want to navigate through data and documents in an efficient and easy way. To achieve this, you should consider including a comprehensive list of required documents and a logical organization to make it easier for investors to locate what they’re looking for. This can be accomplished through the use of metadata, folders, and the use of a consistent naming convention to documents.
Another key tip is to avoid sharing unstructured or unorthodox analyses in the data room. This could be confusing for investors and could indicate an inability to comprehend the business. Also, ensure that you include only information that is relevant to your business. Remove any documents that are no longer relevant. This will help save time and ensure all parties have access to the most current and accurate information.