Last updated on June 26th, 2023 at 12:39 pm
INTRODUCTION
There are many checklists to be found on the Internet that can be adapted to fit your need.The lists you will find on web will vary in length and detail. It’s tempting to disqualify the lengthy lists thinking that they don’t apply to my organization. That conclusion might be risky though. Or, it depends on what your immediate needs are, i.e., if you’re pre-emptively creating a data room for future prospective investors you have more time to adapt the structure as time passes and additional material documents also pass your hands than if you’ve already signed an NDA to show/look at a data room and you have the scope of the letter of intent at hand. In the latter case, depending on the interest of the buyer/seller, a lot of documents might automatically be disqualified as not needed for the purpose. The documents may also vary depending on where in the world you’re located, or where your buyer/seller is located.
Regardless of the purpose
the earlier you start a data room, the easier it is to maintain one. The better maintained your data room is, the faster and less painful the due diligence is. A great data room tells investors that you value and respect the investor’s time. Please note though that it might not be appropriate to share your entire data room as-is to a potential buyer/investor. Evaluate each situation before granting access to the data room. Sensitive information and trade secrets could be part of a material document but not intended for everybody’s eyes.
If you’re setting up the data room yourself start organizing your data room according to extensive data room lists and let all main functions within your organization have a saying about to the outlined documents and ask them to add on any material documents that relate to their functions. The same goes with the data room lists that are set up by external advisors, let all functions read through the entire list before the gathering commences.
Extensive knowledge about the business the buyer/seller is in is crucial to build a relevant data room, or there is a risk that you overlook important documents, even if the data room is staged by an investment banker. Sometimes, confidentiality aspects make it impossible to involve everyone in the company in the data room process – perhaps there are only a few people within the organization that even knows the company is on the market. In such cases, you will be extra glad you prepared your data room long in advance, before a deal was even on the table, when you could still involve everyone, you needed without raising questions or concerns.
The Confiex team specializes in providing premium virtual data room solutions tailored for businesses. With their vast experience in working with document sharing platforms, they have been actively supporting the Virtual Data Room community since 2015 by offering valuable information to users free of charge.