Setting Up a Data Room for Due Diligence: What to Include

A data room is where investors or buyers review your documents during due diligence. A well-organised one speeds up the process and signals a well-run business. A disorganised one creates delays and doubts. This guide covers how to set one up.

Choose a Platform

Use a secure, access-controlled platform with permissions and activity logs. For early rounds, a well-organised shared drive with restricted access can work; later, a dedicated data room tool is common.

A Suggested Structure

1. Corporate

• Certificate of incorporation, MoA and AoA.
• Cap table and register of members.
• Board and shareholder minutes.
• MCA filings.

2. Financial

• Audited financial statements.
• Monthly management accounts.
• Financial model and budget.
• Bank statements and loan agreements.

3. Tax

• Income-tax returns and assessments.
• GST registrations, returns and reconciliations.
• TDS returns.
• Notices and responses.

4. Commercial

• Key customer and supplier contracts.
• Pipeline and customer metrics.

5. People

• Employee list and organisation chart.
• Employment agreements and policies.
• ESOP scheme and grants.
• PF, ESI and Professional Tax compliance.

6. Intellectual Property

• Trademark and other IP registrations.
• IP assignment agreements.

7. Legal

• Litigation and disputes.
• Licences and regulatory approvals.

Tips

1. Use clear file names and an index.
2. Upload final, signed versions.
3. Keep a question-and-answer log.
4. Disclose known issues upfront.
5. Keep the data room updated after the deal for next time.

Getting Help

Think Filing helps businesses build data rooms and manage due diligence.