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Data Room Checklist: What Should You Include? (Template)

Kison Patel
Kison Patel

Kison Patel is the Founder and CEO of DealRoom, a Chicago-based diligence management software that uses Agile principles to innovate and modernize the finance industry. As a former M&A advisor with over a decade of experience, Kison developed DealRoom after seeing first hand a number of deep-seated, industry-wide structural issues and inefficiencies.

CEO and Founder of M&A Science and FirmRoom

In the 21st century, with the majority of documentation, business deals, and correspondence existing electronically, physical storage of documentation has become almost obsolete.

Physical data rooms are more time consuming and cost-ineffective, and are not equipped to handle transactions in the large amounts that they take place today.

Data rooms are the only viable option for proper due diligence in today’s age, and have been shown to continuously rise in popularity for financial transactions.

Why is Data Room Important in Due Diligence?

Due diligence is the process of gathering and providing information about a business or their assets. Data rooms provide a safe place for due diligence information to be gathered and accessed by multiple parties. Due diligence data rooms add value by providing teams with a secure place to evaluate the benefits, costs, and risks associated with an upcoming decision.

due diligence

With the use of a data room, teams can synchronize all processes involved with due diligence, including diligence requests, communication, and document management, in one place. Many data rooms, including FirmRoom, have room structure templates for M&A that outline the necessary information, and allow that information to be collected inside the platform.

This makes it possible to complete diligence requests in half the time and easily track the process, while eliminating any duplicate work as any documentation updates are shared in real time.

Startups and Investor Data Rooms

When startups are talking with prospective investors, data rooms help them analyze interest. Virtual data rooms allow startups to see which investors are spending the most time reviewing specific company documents and how much time they spent in a room to get a better idea of their engagement level.

Throughout the fundraising process, multiple external parties, including auditors, underwriters, and potential investors, must have access to all of the data, such as company documentation and financial information.

With the use of a virtual data room, all of the data required for preparation to raise funding rounds can be uploaded to the data room and accessed by potential investors.

What to Include in Your Data Room?

While this is not a comprehensive list, here are some things to consider adding to a data room offering on buy-side or sell-side, whether for investors or other transactions and capital raise of any size.

What to Include in Your Data Room?

A Business Plan and Marketing Materials.

Why? These encompass the essence of a business, and will be what investors look to in order to learn what a startup does and why they should be interested.

Tips. Make sure to include the following:

  1. Teaser document
  2. Pitch deck
  3. Business plan
  4. Investment memorandum

Intellectual Property

Why? This adds value to a company and makes it unique.

Tips. Make sure to include the following:

  1. Granted and filed patents
  2. Trademarks
  3. Intellectual property strategy
  4. Software license detail
  5. List of open-source software used
  6. Domain name ownership

Financial Statements

Why? Clear, transparent financials build investor confidence and prove to them that the startup is a trustworthy investment.

Tips. Make sure to include the following:

  1. Sources and uses of funds
  2. Income statement, balance sheet, and cash flow statements
  3. Company valuation
  4. Pro-forma statements for next year
  5. Detailsof outstanding debt
  6. Tax returns
  7. Capitalization tables, showing positions of all existing shareholders and investments to date
  8. Profitand loss statements
  9. Financial projection
  10. Asset register
  11. Managementaccounts
  12. Audited accounts
  13. Details of previous raises

Sales and Marketing

Why? This is what outlines a business’s future potential success . Investors look for traction, and will want to see all sales and marketing efforts and results toensure that not only is the startup financially sound, but will continue to grow.

Tips. Make sure to include the following:

  1. Marketing research conducted
  2. Current sales pipeline
  3. Details of sales processes
  4. Customer churn
  5. Customer acquisition cost, if applicable
  6. Projected average revenue per customer  


Why? Investors need to know the ins and outs of how business is conducted and how the startup actually works on a day to day basis. That way, they can determine whether it is up to their standards in terms of functionality, security, and advancement.

Tips. Make sure to include the following:

  1. Overview of tech stack
  2. Details of APIs, integrations, and system architecture
  3. Details on any large integrations
  4. Product backlog export and release map
  5. Screenshots of existing products

The Team

Why? Investors want to know who they will be working with and the people that they are considering investing into, because essentially, the people make the business what it is.

Tips: Make sure to include the following:

  1. Detailed resumes of key management
  2. Employee information (resume, roles within the company, remuneration)
  3. Employee contracts (with titles and salaries)
  4. Consultant contracts (past and present)

Press Releases,Endorsements, and Testimonies.

Why? Press releases, endorsements, and testimonies prove to investors that a company can and will stand out. This lets them know that there has been interest and positive feedback from external sources, so that they can have another opinion on their investment decision.

Regulatory andCompliance

Why? While investors may not initially look for regulatory and compliance until the due diligence phase, this shows investors that not only is the company compliant, but organized and on top of every step of the process. This may answer questions they have before they ever arise.

Tips. Make sure to include the following:

  1. Operating licenses
  2. Environmental impact assessments
  3. Compliance documentation

How to Choose a Data Room?

Inspect the features of a data room before choosing a provider to ensure that your expectations for due diligence and desired functionality will be met. Consider the following:

  • Define your needs and abilities.This includes storage needs, what kinds of files and documents will be stored, the budget, who will be using the data room, and what other purposes the VDR may be fulfilling.
  • Identify desired features. Security, document management features, permission settings, analytics, customer support, and budget are all things to keep in mind.
  • Research security features and compliance. Each VDR provider should have a summary of their security features and compliance on their website.
  • Read reviews. See what other companies are reporting with regards to interface, ease of use, efficiency, and any security complaints.
  • Reach out to customer support. Use this as a gauge of response time and knowledge, as you’ll likely be needing them in the future.
  • Request a free trial. Do hands-on research and see if the product actually works the way that you’d like it to.

Here are the top rated diligence data room providers, as of 2023, based on features and due diligence capabilities.

1. DealRoom, Due DiligenceSoftware

2. FirmRoom

3. Merrill Data Room

4. Intralinks

5. Firmex

6. iDeals

Data Room Checklist Template

At FirmRoom, we have created a due diligence folder structure, built into the platform, incorporating all of the necessary steps and information needed to move forward.

Get Your Checklist Template Here

Using this folder structure, it is possible to track the progress and secure all necessary documentation.

A basic example of this checklist would be as such:

  • Legal
  • Commercial
  • Financial
  • HumanResources
  • IntellectualProperty
  • InformationTechnology
  • Environmental,Health and Safety
  • Tax
  • Marketing
  • Compliance and Regulatory Matters

Each of the sections will contain more specific information pertaining to your company, but the above list can serve as an organization guideline to help make the due diligence process more approachable. And if you have a preferred pre-made folder structure template, you can upload it into the room as well.

Additionally, you can use FirmRoom's pre-built data room index.

How to Use the Data Room ChecklistTemplate?

WithFirmRoom, getting started is as easy as following these five steps:  

  1. Download a free data room checklist
  2. Start a FirmRoom data room free trial
  3. Import the checklist into the data room
  4. Start adding documents and assign access to relevant people
  5. Start enjoying the benefits of the data room and monitor investor/team interest

Frequently Asked Questions (FAQs)

Key takeaways

Contact M&A Science to learn more

Virtual Data Room Comparison Guide

Compare VDRs and see the whole picture when it comes to choosing the best data room for your business.

Download the comparison