Due Diligence Data Room: Complete Document Checklist for M&A in 2025
Incomplete due diligence data rooms delay M&A transactions by 3-8 weeks and reduce valuations by 10-15%, according to Intralinks research. Missing or disorganized documents signal execution risk to buyers—often killing deals entirely or forcing significant price reductions.
Peony eliminates diligence delays: AI-powered checklists identify missing documents, automatic organization structures materials properly, and complete templates ensure nothing's overlooked. Purpose-built for M&A transactions.
Here's your complete due diligence document checklist for 2025.
Types of Due Diligence
1. M&A Due Diligence
Purpose: Evaluate target company before acquisition
Focus areas:
- Financial health and projections
- Legal liabilities and risks
- Operational capabilities
- Technology and IP
- Customer and market position
- Cultural fit
Buyers need: Comprehensive disclosure, organized access, responsive Q&A
2. Financial Due Diligence
Purpose: Assess financial health before investment or loan
Focus areas:
- Historical financial performance
- Revenue quality and sustainability
- Cost structure and margins
- Working capital requirements
- Debt and liabilities
- Financial projections accuracy
Investors/lenders need: Audited statements, detailed models, variance explanations
3. Legal Due Diligence
Purpose: Identify legal risks and liabilities
Focus areas:
- Corporate structure and governance
- Material contracts
- Litigation history
- IP ownership
- Regulatory compliance
- Employment matters
Legal teams need: Complete contract library, court filings, regulatory correspondence
4. Operational Due Diligence
Purpose: Evaluate business operations and efficiency
Focus areas:
- Key processes and systems
- Operational metrics
- Vendor relationships
- Quality control
- Scalability assessment
Operations teams need: Process documentation, vendor contracts, performance metrics
5. Technology Due Diligence
Purpose: Assess technology capabilities and risks
Focus areas:
- System architecture
- Code quality
- Technical debt
- Security measures
- Scalability
- Development practices
Tech teams need: Architecture diagrams, code samples, security audits
6. Commercial Due Diligence
Purpose: Validate market opportunity and competitive position
Focus areas:
- Market size and growth
- Customer base quality
- Sales pipeline
- Competitive landscape
- Go-to-market effectiveness
Commercial teams need: Customer data, pipeline reports, market research
Complete Due Diligence Checklist
Corporate and Legal Documents
Essential:
- Certificate of Incorporation
- Bylaws or Operating Agreement
- All amendments to charter
- Board meeting minutes (all)
- Shareholder agreements
- Stock ledger
- Cap table (current and fully diluted)
- Prior financing documents
Nice to have:
- Corporate structure chart
- Subsidiary documentation
- Corporate policies
- D&O insurance
Financial Documents
Essential:
- Audited financial statements (3-5 years)
- Management accounts (monthly, 24+ months)
- Balance sheets (historical)
- Income statements (historical)
- Cash flow statements (historical)
- Financial projections (3-5 years)
- Current budget vs. actual
- Cap table with all rounds
- Bank statements (6-12 months)
Nice to have:
- Budget variance analysis
- Segment financial reporting
- Customer cohort analysis
- Unit economics details
- Working capital analysis
Contracts and Agreements
Customer contracts:
- Top 10-20 customer agreements
- Template customer agreement
- Revenue concentration analysis
- Multi-year commitments
- Service level agreements
Vendor and supplier:
- Material vendor contracts (greater than $50k annual)
- Infrastructure agreements (AWS, etc.)
- Software licenses
- Professional services agreements
Partnership agreements:
- Channel partner agreements
- Technology partnerships
- Co-marketing arrangements
- Reseller agreements
Real estate:
- Office lease agreements
- Sublease arrangements
- Property deeds (if owned)
Intellectual Property
Patents:
- Patent portfolio summary
- Filed patent applications
- Granted patents
- Patent prosecution history
- Patent strategy document
Trademarks:
- Trademark registrations
- Pending applications
- Domain registrations
- Brand guidelines
Copyrights:
- Copyright registrations
- Open source license compliance
- Third-party licenses
IP assignments:
- Founder IP assignment agreements
- Employee IP assignment (all)
- Contractor IP assignment (all)
- Prior employer releases
Trade secrets:
- Trade secret identification
- Protection procedures
- Confidentiality policies
Human Resources
Organization:
- Current organizational chart
- Headcount by department
- Job descriptions (key roles)
- Hiring plan
- Contractor list
Employment:
- Executive employment agreements
- Offer letters (all employees)
- Contractor agreements
- Advisor agreements
- Consultant arrangements
Compensation:
- Salary bands by role
- Commission plans
- Bonus structures
- Benefits summary
- Payroll records
Equity:
- Stock option plan
- Option grants (all)
- Vesting schedules
- Exercise history
- 83(b) elections
Policies:
- Employee handbook
- Code of conduct
- IP assignment policy
- Non-compete policy
- Remote work policy
Technology and Product
Product documentation:
- Product overview
- Screenshots and videos
- Feature list
- Product roadmap
- Release history
Technical:
- System architecture diagram
- Technology stack list
- Infrastructure overview
- API documentation
- Third-party dependencies
Security:
- Security whitepaper
- Penetration test results
- SOC 2 report (if applicable)
- Security policies
- Incident response plan
- Data privacy approach
Development:
- Development process documentation
- Code repository access
- Technical debt assessment
- Test coverage metrics
Customer and Sales
Customer data:
- Customer list (with revenue)
- Top 20 customers analysis
- Customer concentration metrics
- Customer references (3-5)
- Case studies
Sales metrics:
- Sales pipeline by stage
- Conversion rates
- Average deal size
- Sales cycle length
- Win/loss analysis
Product metrics:
- Monthly/Annual Recurring Revenue
- Customer acquisition cost
- Lifetime value
- Churn rate
- Net revenue retention
Market and Competition
Market analysis:
- TAM/SAM/SOM calculation
- Market growth rate
- Geographic breakdown
- Industry research citations
Competitive:
- Competitor comparison matrix
- Competitive positioning
- Win/loss analysis
- Differentiation strategy
Regulatory and Compliance
Regulatory:
- All regulatory filings
- Required licenses and permits
- Inspection reports
- Corrective actions
Compliance:
- Compliance certifications
- Audit reports
- Policy documentation
- Training records
Litigation:
- Pending litigation summary
- Threatened claims
- Settlement agreements
- Insurance policies
Insurance and Risk
Insurance:
- General liability
- D&O insurance
- E&O insurance
- Cyber insurance
- Property insurance
Risk management:
- Risk assessment
- Business continuity plan
- Disaster recovery plan
- Crisis communication plan
Document Organization
Folder structure:
/01_Corporate_Documents
/Incorporation
/Governance
/Shareholder_Matters
/02_Financial_Information
/Historical_Financials
/Projections
/Cap_Table
/Tax
/03_Contracts
/Customer_Contracts
/Vendor_Contracts
/Partner_Agreements
/Real_Estate
/04_Intellectual_Property
/Patents
/Trademarks
/Copyrights
/Assignments
/05_Human_Resources
/Organization
/Employment_Agreements
/Compensation
/Policies
/06_Technology
/Product_Documentation
/Architecture
/Security
/Development
/07_Sales_and_Marketing
/Customer_Data
/Sales_Metrics
/Marketing_Materials
/08_Regulatory_and_Compliance
/Filings
/Licenses
/Audits
/Litigation
/09_Operations
/Processes
/Vendor_Management
/Facilities
/10_Insurance_and_Risk
/Policies
/Risk_Management
Naming conventions:
YYYY-MM-DD_Category_Description_Version.ext- Clear, descriptive names
- Consistent formatting
- Version numbers when applicable
Access Control Strategy
Staged disclosure:
Level 1 - Initial interest:
- Company overview
- Financial summary
- Product overview
- Management bios
Level 2 - Serious interest:
- Detailed financials
- Customer contracts
- Sales metrics
- Product roadmap
Level 3 - LOI signed:
- Complete financial detail
- All contracts
- IP documentation
- Employee details
Level 4 - Under contract:
- Everything
- Legal minutiae
- Sensitive partnerships
- Competitive intel
Peony's granular permissions enable this staged approach easily.
How Peony Streamlines Due Diligence
Peony accelerates due diligence:
AI-powered setup:
- Upload documents in bulk
- AI organizes automatically
- Identifies missing items
- Suggests folder structure
- Creates index
Professional presentation:
- Custom branded domain
- Clean, intuitive interface
- Fast search and navigation
- Mobile-optimized viewing
Complete analytics:
- Track buyer engagement
- See which documents reviewed
- Identify concern areas
- Time follow-ups perfectly
- Monitor diligence progress
Security and control:
- Staged access disclosure
- Dynamic watermarks
- Email verification
- Complete audit trails
- Instant access revocation
Result: Complete due diligence in weeks instead of months.
Conclusion
Comprehensive, well-organized due diligence data rooms accelerate transactions, reduce buyer concerns, and support stronger valuations. While creating them manually takes 40-80 hours, platforms like Peony use AI to organize documents automatically, ensure nothing's missing, and provide complete visibility into buyer engagement.
Use this checklist to prepare complete due diligence materials, follow best practices for organization and access control, and leverage technology to streamline the process—enabling faster, more successful deal execution.
Create your due diligence data room: Try Peony