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 who requires a secure way to share sensitive information. A data room (also called a virtual dataroom for due diligence) gives you the distribution and control you require to finish your transaction.
Requests for information from investors are made during the deal flow process but they tend to happen in two phases. Stage 1: Data required to prepare a Term Sheet (e.g. product-market fit and financial models, cap table).
Stage 2: detailed due diligence request (e.g. security-related documents, agreements with material and more).
When creating a room for data, remember that investors would like to navigate through data and documents efficiently and in a simple way. To achieve this, you should consider having a comprehensive list of essential documents and a clear structure that makes it easier for investors to locate what they are looking for. This can be accomplished by using folders, metadata, and the same naming conventions for documents.
Another tip is to not share fragmented and unconventional analyses in the dataroom. This can be confusing to investors and show an inability to comprehend your business. Include only the information relevant to your business, and eliminate documents that are no longer valid. This will save you time and ensure that all parties have access to the most up-to-date and accurate information.