Often selling a company requires sensitive documents and data be shared among multiple buyers. If you’re trying to sell your business or simply require sharing sensitive information in a safe manner, a virtual data room is the answer. A data room (also known as a virtual dataroom for due diligence) provides the control and distribution that you require to complete your transaction.
Requests for investor data are made throughout the deal flow process but they typically occur in two phases. Stage 1-data required to prepare a Term Sheet (e.g. product-market fit, financial a fantastic read models Cap Table).
Stage 2 detailed due diligence information requests (e.g., security-related docs as well as material agreements and more).
When you are creating a data space be aware that investors are looking for efficient and easy navigation through the documents and data. Think about including a comprehensive documents list and a well-organized structure to aid investors in finding the documents they need. This can be accomplished through the use of metadata, folders and the use of a consistent naming convention to documents.
Another tip is to avoid sharing incomplete or unorthodox analysis in the data room. This could be confusing for investors and could indicate an inability to comprehend the business. Also, make sure you include only the information that will benefit your business. Remove any documents that are no more relevant. This will save you time and ensure that all parties have the most current and accurate data.