Investor data rooms are secure virtual spaces that businesses utilize to share sensitive data with advisors and buyers during due diligence of M&A deals. These rooms are usually monitored and secured to ensure that sensitive information doesn’t fall into wrong hands. The best virtual data rooms provide due diligence checklists that can be used to streamline the process of collecting documents and ensure that they are collected in a secure manner.

Documents that you need to include in your investor data room may depend on the particular situation and the transaction, however some essential documents are required for every data room:

Legal Information: This includes articles that incorporate intellectual property registrations, as well as employee stock agreements. The cap table is included, which breaks down ownership percentages and stakes in your business. Founders can also opt to include any previous updates to investors, which show investors that they care about transparency and communication with investors.

Financial Information It includes historical and projected financial statements and explains assumptions, sources, and reasoning behind those projections. Founders may also include their business plan and product roadmap here as well.

Founders may choose to divide the investor data room and restrict access by assigning different user roles. For example one section could have strategy documents and presentation decks for early stage investors while the second section would contain more detailed legal documentation aimed at more serious investors. This lets them save valuable time by only sharing documents they require and also allows them to have greater control over the sensitive information they share.

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