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Often selling a business requires sensitive documents and data be shared with a variety of buyers. Virtual data rooms are a great solution for those looking to sell their business or wants to securely share sensitive information. A data room, also referred to as a virtual dataroom for due diligence can provide the secure distribution and control that you need for your transaction.
Investor data requests are made throughout the deal flow process but they tend to happen in two stages. Stage 1 data is required to create a term Sheet (e.g. market fit of the product and financial models Cap Table).
Stage 2 detailed due diligence information request (e.g. security-related documents, material agreements, and more).
When you are creating a dataroom keep in mind that investors need to browse through documents and data in an efficient and easy way. You should consider including a comprehensive document list and a logical structure that will help investors locate the documents they require. A good way to do this is by utilizing metadata, folders, and an enduring document naming convention.
Another key point is to avoid sharing unstructured or unorthodox analyses in the data room. This could be confusing for investors and could signal that they are not aware of the business. Include only the relevant information to your company and eliminate documents that are no longer valid.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.
