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Naming conventions are important!
Keep sensitive document at the bottom of your lists
Use index gaps strategically if at all
Once your documents are securely in the data room, you can start inviting bidders in to commence their due diligence. The most important considerations you should make are:
Can they find all the documents they’re looking for?
Are sensitive documents successfully hidden from the right people?
Top tip!You want to make sure your sensitive documents are at the bottom of the pile. This will mean that you don’t have any gaps in your index structure.
What will gaps in my index do to my M&A process? Gaps in your index will only promote questions from bidders – What documents are missing and why don’t I have access? To avoid this, you need to make sure your documents are at the bottom of your index list so that anyone without access will simply think there are no more documents in that folder.
Top tip!If you want to create competitive tension (making your bilateral process seem like an auction) go right ahead and keep those index gaps!
What should I name my documents? Naming conventions are important. While you might know what file ‘PL19.4’ (P&L 2019 April) refers to, you should try and think of everything from the perspective of someone who doesn’t know. The longer due diligence takes, the less likely you are to reach your ideal outcome.
Bidders want to do their best to get to know your business, you can help them by ensuring all documents are easy for them to find. If a bidder can’t find something, they will normally ask you to provide it, which means you’ll need to spend time pointing them in the right direction. Here are a couple of our tips for naming documents:
Dates: choose how you’ll display your dates and stick to it! Think about what will work best for your bidders as well – are the majority American? Would they prefer to see month/day/year or day/month/year?
Document Names: Always keep them concise and ensure they clearly state what the bidder will find in said document.