Data Room Preparation Kit

DATA ROOM PHILOSOPHY

Why Data Rooms Make or Break Deals

DATA ROOM FUNDAMENTALS

PURPOSE OF A DATA ROOM:
☐ Provide buyer access to diligence info
☐ Control what buyers see and when
☐ Track buyer interest/engagement
☐ Demonstrate organizational maturity
☐ Reduce deal timeline
☐ Minimize repetitive questions

DATA ROOM FIRST IMPRESSIONS:
☐ Disorganized data room = disorganized company
☐ Missing docs = red flags
☐ Quick responses = well-run company
☐ First 48 hours shape buyer perception

DATA ROOM BEST PRACTICES:
☐ Prepare before you need it
☐ Organize logically (buyer's perspective)
☐ Name files consistently
☐ Update regularly during process
☐ Track what buyers review
☐ Anticipate follow-up questions

COMMON DATA ROOM MISTAKES:
☐ Documents incomplete or outdated
☐ Poor organization (can't find anything)
☐ Inconsistent naming
☐ Missing critical documents
☐ Too much junk (irrelevant docs)
☐ Slow to add requested items
☐ Not tracking buyer activity

DATA ROOM TIMING:
☐ Start populating 3-6 months before process
☐ Initial room ready before first buyer meeting
☐ Full room before LOI execution
☐ Confirm room complete before exclusivity

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COMPREHENSIVE DATA ROOM ORGANIZATION

Complete Data Room Index

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DATA ROOM MASTER INDEX
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SECTION 1: CORPORATE (Est. documents: 50+)
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1.1 FORMATION DOCUMENTS
    ☐ Certificate of Incorporation (and amendments)
    ☐ Bylaws (current version)
    ☐ Operating Agreement (if LLC)
    ☐ State registrations (all jurisdictions)
    ☐ Good standing certificates (current)
    ☐ Business licenses

1.2 BOARD MATERIALS
    ☐ Board minutes (all meetings, inception to date)
    ☐ Board resolutions (written consents)
    ☐ Board presentation decks (past 2 years)
    ☐ Committee charters
    ☐ Director agreements
    ☐ D&O questionnaires

1.3 SHAREHOLDER MATERIALS
    ☐ Shareholder meeting minutes
    ☐ Shareholder resolutions/consents
    ☐ Shareholder agreements
    ☐ Investor rights agreements
    ☐ Voting agreements
    ☐ Right of first refusal agreements
    ☐ Co-sale agreements

1.4 CAPITALIZATION
    ☐ Cap table (current, fully diluted)
    ☐ Cap table (waterfall scenarios)
    ☐ Stock ledger
    ☐ Stock certificates (or evidence of issuance)
    ☐ Stock purchase agreements
    ☐ Stock restriction agreements
    ☐ 83(b) elections (all)

1.5 EQUITY PLANS
    ☐ Equity incentive plans (all versions)
    ☐ Option grant summary (all grants)
    ☐ Option agreements (template)
    ☐ Exercise notices
    ☐ 409A valuations (last 3 years)

1.6 FINANCING HISTORY
    ☐ Term sheets (all rounds)
    ☐ Stock purchase agreements (all rounds)
    ☐ Convertible note documents
    ☐ SAFE agreements
    ☐ Warrant agreements
    ☐ Debt agreements
    ☐ Side letters

1.7 SUBSIDIARIES/AFFILIATES
    ☐ Subsidiary organization docs
    ☐ Intercompany agreements
    ☐ JV agreements
    ☐ Investment documentation

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SECTION 2: FINANCIAL (Est. documents: 75+)
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2.1 AUDITED FINANCIALS
    ☐ Audited financial statements (3 years)
    ☐ Audit opinions/letters
    ☐ Management letters
    ☐ Audit adjustments

2.2 INTERNAL FINANCIALS
    ☐ Monthly P&L (24+ months)
    ☐ Monthly balance sheet (24+ months)
    ☐ Monthly cash flow (24+ months)
    ☐ Management financials package (sample)
    ☐ Segment/product line P&Ls

2.3 REVENUE DETAIL
    ☐ Revenue by customer (monthly, 24 months)
    ☐ Revenue by product/SKU
    ☐ Revenue by geography
    ☐ Recurring vs. non-recurring split
    ☐ Deferred revenue schedule
    ☐ Revenue recognition policies

2.4 BUDGET & PROJECTIONS
    ☐ Current year budget
    ☐ Budget vs. actual reports (monthly)
    ☐ Financial projections (3-5 years)
    ☐ Assumptions documentation
    ☐ Scenario analyses

2.5 ACCOUNTING
    ☐ Chart of accounts
    ☐ Accounting policies summary
    ☐ Revenue recognition policy
    ☐ Capitalization policies
    ☐ Inventory policies (if applicable)

2.6 TAX
    ☐ Federal tax returns (3+ years)
    ☐ State tax returns (all states, 3+ years)
    ☐ Local/city tax returns
    ☐ International tax returns
    ☐ Sales/use tax returns (sample)
    ☐ Payroll tax filings
    ☐ Tax audits/disputes
    ☐ Tax positions/exposures memo

2.7 BANKING & DEBT
    ☐ Bank statements (12 months)
    ☐ Credit facilities documentation
    ☐ Loan agreements
    ☐ Covenant compliance certificates
    ☐ Letters of credit
    ☐ UCC filings

2.8 WORKING CAPITAL
    ☐ AR aging report (current)
    ☐ AR aging trend (12 months)
    ☐ Bad debt write-offs
    ☐ AP aging report (current)
    ☐ Inventory aging (if applicable)
    ☐ Prepaid schedules
    ☐ Accrual schedules

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SECTION 3: LEGAL (Est. documents: 100+)
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3.1 MATERIAL CONTRACTS INDEX
    ☐ Contract summary schedule
    ☐ Change of control matrix
    ☐ Termination provisions summary

3.2 CUSTOMER CONTRACTS
    ☐ Top 25 customer contracts
    ☐ Master service agreements (templates)
    ☐ Standard terms and conditions
    ☐ SLA documentation
    ☐ Price lists/rate cards
    ☐ Custom terms summary

3.3 VENDOR/SUPPLIER CONTRACTS
    ☐ Material vendor agreements
    ☐ Supplier contracts
    ☐ Service provider agreements
    ☐ Hosting/infrastructure agreements
    ☐ Software licenses

3.4 PARTNERSHIP/DISTRIBUTION
    ☐ Strategic partnership agreements
    ☐ Reseller agreements
    ☐ Distribution agreements
    ☐ OEM agreements
    ☐ Referral agreements
    ☐ Integration agreements

3.5 REAL ESTATE
    ☐ Lease agreements (all locations)
    ☐ Lease amendments
    ☐ Sublease agreements
    ☐ Owned property documents
    ☐ Facility maintenance contracts

3.6 INTELLECTUAL PROPERTY
    ☐ Patent schedule (applications/grants)
    ☐ Patent assignment agreements
    ☐ Trademark registrations
    ☐ Domain name portfolio
    ☐ Copyright registrations
    ☐ Trade secret policies
    ☐ IP assignment chain documentation

3.7 LICENSES
    ☐ Inbound license agreements
    ☐ Outbound license agreements
    ☐ Open source inventory
    ☐ Open source compliance documentation
    ☐ Third-party software licenses

3.8 LITIGATION
    ☐ Pending litigation summary
    ☐ Complaint/pleading documents
    ☐ Settlement agreements
    ☐ Threatened claims correspondence
    ☐ Legal opinions (material matters)

3.9 REGULATORY
    ☐ Regulatory filings
    ☐ Permits and licenses
    ☐ Government correspondence
    ☐ Compliance certifications
    ☐ Regulatory audits

3.10 INSURANCE
    ☐ Insurance policy summary
    ☐ D&O insurance
    ☐ E&O insurance
    ☐ General liability
    ☐ Cyber insurance
    ☐ Claims history

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SECTION 4: COMMERCIAL (Est. documents: 50+)
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4.1 CUSTOMER DATA
    ☐ Customer list (with contract values)
    ☐ Customer concentration analysis
    ☐ Customer tenure analysis
    ☐ Cohort retention analysis
    ☐ Churn analysis (detailed)
    ☐ NRR/NDR analysis

4.2 SALES
    ☐ Sales organization chart
    ☐ Sales process documentation
    ☐ Pipeline report (current)
    ☐ Pipeline history (12 months)
    ☐ Win/loss analysis
    ☐ Sales cycle analysis
    ☐ Sales productivity metrics

4.3 MARKETING
    ☐ Marketing organization chart
    ☐ Marketing strategy documentation
    ☐ Lead generation analysis
    ☐ CAC analysis
    ☐ Channel performance analysis
    ☐ Brand materials
    ☐ Marketing spend history

4.4 PRICING
    ☐ Pricing strategy documentation
    ☐ Price list/rate card
    ☐ Discount policies
    ☐ Pricing history
    ☐ Competitive pricing analysis

4.5 MARKET ANALYSIS
    ☐ Market size analysis
    ☐ Competitive landscape
    ☐ Industry reports
    ☐ Analyst coverage
    ☐ Customer research/surveys

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SECTION 5: PEOPLE/OPERATIONS (Est: 75+)
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5.1 ORGANIZATION
    ☐ Organization chart (current)
    ☐ Headcount by department
    ☐ Headcount by location
    ☐ Headcount history (trend)
    ☐ Open positions

5.2 EXECUTIVE TEAM
    ☐ Executive bios
    ☐ Executive employment agreements
    ☐ Executive compensation summary
    ☐ Executive equity holdings
    ☐ Change of control provisions

5.3 COMPENSATION
    ☐ Compensation philosophy
    ☐ Salary bands/ranges
    ☐ Compensation summary (anonymized)
    ☐ Bonus/commission plans
    ☐ Equity grant summary
    ☐ Benchmarking analysis

5.4 BENEFITS
    ☐ Benefits summary
    ☐ 401(k) plan documents
    ☐ Health insurance plans
    ☐ Other benefit plans
    ☐ PTO policies

5.5 HR POLICIES
    ☐ Employee handbook
    ☐ Code of conduct
    ☐ Remote work policy
    ☐ Anti-harassment policy
    ☐ Confidentiality agreements (template)
    ☐ Non-compete agreements (template)
    ☐ IP assignment agreements (template)

5.6 COMPLIANCE
    ☐ I-9 compliance confirmation
    ☐ Contractor agreements (template)
    ☐ Contractor classification memo
    ☐ Workers comp documentation
    ☐ Safety compliance
    ☐ EEOC filings (if any)

5.7 HR METRICS
    ☐ Turnover analysis
    ☐ Tenure distribution
    ☐ Employee engagement data
    ☐ Glassdoor/reputation summary

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SECTION 6: PRODUCT/TECHNOLOGY (Est: 50+)
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6.1 PRODUCT
    ☐ Product overview documentation
    ☐ Product roadmap
    ☐ Feature list/comparison
    ☐ Product screenshots/demos
    ☐ User documentation

6.2 TECHNOLOGY
    ☐ System architecture diagram
    ☐ Technology stack overview
    ☐ Infrastructure diagram
    ☐ Data architecture
    ☐ Integration architecture
    ☐ Development methodology

6.3 ENGINEERING
    ☐ Engineering organization chart
    ☐ Development process documentation
    ☐ Code quality metrics
    ☐ Technical debt assessment
    ☐ Release process documentation

6.4 SECURITY
    ☐ Security policies
    ☐ Security architecture
    ☐ Penetration test reports
    ☐ Vulnerability assessments
    ☐ Security incident history
    ☐ SOC 2 reports
    ☐ Other compliance certs

6.5 OPERATIONS
    ☐ SLA documentation
    ☐ Uptime/availability reports
    ☐ Incident history
    ☐ Disaster recovery plan
    ☐ Business continuity plan
    ☐ Backup procedures

6.6 DATA
    ☐ Data privacy policy
    ☐ Data processing agreements
    ☐ GDPR compliance documentation
    ☐ Data retention policies
    ☐ Data security documentation

Comprehensive Document Status Tracker

Section	Sub-Section	Doc Count	Status	Owner	Due	Notes
1. Corporate	1.1 Formation	__	☐ Not started
1. Corporate	1.2 Board	__	☐ Not started
1. Corporate	1.3 Shareholders	__	☐ Not started
1. Corporate	1.4 Cap table	__	☐ Not started
1. Corporate	1.5 Equity plans	__	☐ Not started
1. Corporate	1.6 Financing	__	☐ Not started
2. Financial	2.1-2.2 Financials	__	☐ Not started
2. Financial	2.3-2.4 Revenue/Budget	__	☐ Not started
2. Financial	2.5-2.8 Tax/Banking	__	☐ Not started
3. Legal	3.1-3.5 Contracts	__	☐ Not started
3. Legal	3.6-3.7 IP	__	☐ Not started
3. Legal	3.8-3.10 Litigation/Reg	__	☐ Not started
4. Commercial	4.1-4.5 Sales/Mktg	__	☐ Not started
5. People	5.1-5.7 HR/Ops	__	☐ Not started
6. Product	6.1-6.6 Tech	__	☐ Not started

Data Room Quality Standards

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DATA ROOM QUALITY CHECKLIST
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BEFORE EACH DOCUMENT UPLOAD:

COMPLETENESS:
☐ Document is complete (no missing pages)
☐ All signatures present (if applicable)
☐ All exhibits/attachments included
☐ Most current version

FORMAT:
☐ PDF format (final documents)
☐ Excel format (financial models - unlocked)
☐ Readable quality (not blurry)
☐ OCR applied (searchable)
☐ Reasonable file size

NAMING CONVENTION:
☐ Follow standard: [Section.Subsection]-[DocName]-[Date]
☐ Examples:
   - 1.1-Certificate-of-Incorporation-2019-03-15.pdf
   - 2.1-Audited-Financials-FY2023.pdf
   - 3.2-Customer-Agreement-Acme-Corp-2024-01-01.pdf
   - 5.2-Executive-Employment-Agreement-CFO.pdf

SECURITY:
☐ Sensitive info redacted (SSN, personal data)
☐ Watermark applied (if required)
☐ Access level appropriate
☐ Confidential marking clear

VERSION CONTROL:
☐ Only one version of each document
☐ Superseded versions removed or archived
☐ Date clear on document
☐ Version number if multiple versions expected

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DATA ROOM ACCESS MANAGEMENT
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ACCESS LEVELS:
Level 1: Basic (teaser materials)
Level 2: Standard (most DD docs)
Level 3: Sensitive (compensation, litigation)
Level 4: Highly restricted (key customer names)

ACCESS LOG TRACKING:
☐ Track who viewed what documents
☐ Track time spent per document
☐ Track downloads
☐ Report to deal team weekly

BUYER ACCESS PROTOCOL:
☐ NDA signed before any access
☐ Clean team provisions (if applicable)
☐ Staged access (levels unlock over time)
☐ Revoke access post-close or deal end

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Q&A MANAGEMENT
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Q&A PROCESS:
☐ Centralized Q&A log
☐ Questions routed to appropriate owner
☐ Response time targets (24-48 hours)
☐ Legal review of sensitive responses
☐ Written responses only (no verbal)

Q&A LOG TEMPLATE:
| # | Date | From | Question | Owner | Response | Status |
|---|------|------|----------|-------|----------|--------|
| 1 | | | | | | ☐ Open |
| 2 | | | | | | ☐ Open |

RESPONSE GUIDELINES:
☐ Answer the question asked (no more)
☐ Factual, not argumentative
☐ Legal review if sensitive
☐ Don't volunteer information
☐ If unknown, say so (don't guess)
☐ Track for patterns (repeat questions)

Data Room Preparation Timeline

DATA ROOM PREPARATION SCHEDULE

T-180 DAYS (6 months before):
☐ Assign data room project owner
☐ Select data room platform
☐ Create folder structure
☐ Begin gathering corporate documents
☐ Begin gathering financial documents

T-120 DAYS (4 months before):
☐ Corporate section 80% complete
☐ Financial section 80% complete
☐ Legal section 50% complete
☐ Begin commercial/people sections

T-90 DAYS (3 months before):
☐ All sections 80% complete
☐ Quality review round 1
☐ Missing documents identified
☐ Timeline to obtain missing docs

T-60 DAYS (2 months before):
☐ All sections 95% complete
☐ Quality review round 2
☐ Test access with internal team
☐ Q&A process documented

T-30 DAYS (1 month before):
☐ Data room 100% ready
☐ Final quality review
☐ Access levels configured
☐ Q&A team assigned
☐ Ready for buyer access

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