Series 79: Setting Up The Data Room

Setting Up the Data Room

The data room, sometimes called the document room, is a repository of these due diligence materials. In the past, the data room was a physical room, typically at a law firm or other location, where junior lawyers and investment bankers would spend countless hours tediously reviewing hard copies of documents. To add to the fun, data rooms were frequently windowless or even subterranean. Today, the data room is usually but not always virtual: electronic versions of the documents are posted on a secure, password-protected website. As a result of this evolution, travel to the data room is unnecessary, and junior lawyers and investment bankers can spend countless hours tediously reviewing documents on a computer screen from the comfort of their own offices.

The sell-side investment banker works with the seller and other professionals to identify and organize the documents presented in the data room. The contents of the data room vary from one transaction to the next, but a typical data room contains the following general categories of documents:

• • Basic corporate information—articles of incorporation and bylaws; m