Selling a business usually requires sharing sensitive data and documents with several 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 referred to as a due diligence virtual dataroom offers the secure distribution and control that you need for your transaction.
Data requests from investors are received throughout the entire deal flow process however, they typically occur in two phases one stage: Stage 1 data required to create the term sheet (e.g., financial models, product-market fit and cap table).
Stage 2 detailed due diligence information request (e.g. security-related documents, material agreements and more).
When designing a dataroom, keep in mind that investors need to navigate through data and documents efficiently and in a straightforward way. To achieve this, consider having a comprehensive list of essential documents and a clear structure that makes it easier for investors to find the information they need. This can be achieved by using metadata, folders, and the use of a consistent naming convention to documents.
A second tip is to avoid sharing the results of your studies in a sporadic and inconsistent manner in the dataroom. This could be confusing for investors and could indicate lack of understanding of the business. Also, ensure that you include only information that will benefit your business and eliminate any docs that are no anymore relevant. This will save you time and ensure that all parties have access to the most up-to date and accurate information.