Due Diligence Data Room: Complete Document Checklist for M&A in 2025
If you are new to diligence, you do not need a law degree to set up a clean, professional data room. You need a sensible folder map, clear file names, and a short explanation of why each document belongs. This guide gives you exactly that—plus a simple way to stage access so buyers get what they need without seeing what they do not. Industry checklists and legal references point to the same core categories, so you can rely on this structure with confidence.
Pro tip: Use a modern virtual data room like Peony to implement these best practices with enterprise-grade security and analytics that help you track buyer engagement throughout the process.
What a diligence data room is—and what buyers expect in 2025
A diligence data room is a secure online workspace where you collect the documents a buyer will review before making an offer or closing a deal. The room should make it easy to find information, control who can view it, and record what happened during the process. This definition is consistent across leading providers and legal publishers, and it is why most checklists look similar even when the language differs.
Two 2025 realities shape what you share and how you share it. First, buyers—especially public companies—ask more pointed questions about cybersecurity governance because of the U.S. Securities and Exchange Commission's new disclosure rules on material cyber incidents and annual cyber governance reporting. Second, the U.S. patchwork of state privacy laws continues to expand, so buyers check how you collect, store, and share personal data across states. These trends do not change your folder list, but they do raise the bar on clarity and access control.
A folder tree that works on the first try (and why)
Create folders that mirror how diligence teams read a business. This simple structure keeps the learning curve low and reduces repeat questions:
00_Intro & Process
01_Corporate & Cap Table
02_Financials & KPIs
03_Tax
04_Legal & Key Contracts
05_Customers & Revenue
06_HR & Payroll
07_IP & Technology
08_Security & Privacy
09_Product & Operations
10_Regulatory & Compliance
11_Litigation & Claims
12_Insurance
13_Real Estate & Facilities
14_ESG / Environmental (if relevant)
99_Confirmatory / Disclosure Schedules (gate until late-stage)
This layout matches what law-firm checklists and VDR providers have recommended for years, which is why buyers recognize it immediately and work faster inside it. If your business is unusual (for example, a biotech with clinical data or a regulated marketplace), you can add one specialized folder rather than reinvent the map.
A quick naming rule that prevents version chaos: YYYY-MM Topic – Counterparty – vN (for example, 2025-01 Customer MSA – Acme – v3.pdf). Use one file per item and replace the file when you revise it, so the room never contains duplicates that contradict each other. This sounds basic, but it eliminates hours of back-and-forth.
What to upload—and why buyers ask for it
Each section below explains (1) what to include and (2) why a buyer needs it. That second sentence is important: when reviewers understand the purpose, they ask fewer one-off questions and move through your room more quickly. This comprehensive checklist is based on industry best practices and legal requirements that diligence teams expect to see.
01) Corporate & Cap Table
Include: formation documents, bylaws or operating agreement and all amendments, a current and fully diluted cap table, board and stockholder consents, subsidiary list, and certificates of good standing.
Why it matters: these documents show the company has authority to transact and that ownership is accurate, so the buyer can see what approvals are required to complete the deal without last-minute surprises.
02) Financials & KPIs
Include: audited or reviewed financial statements (3–5 years where available), monthly financials for the last 24–36 months, revenue waterfalls that connect billings to GAAP revenue, AR/AP aging, cohort and retention analyses if you sell subscriptions, gross-margin and contribution-margin builds, and a forecast with clear assumptions.
Why it matters: this package lets a buyer test whether earnings are durable, whether growth is efficient, and whether the forecast is grounded in recent performance rather than optimistic narrative.
03) Tax
Include: filed federal, state, and (if applicable) international returns for 3–5 years, schedules for net operating losses or credits, sales and use tax filings, a nexus analysis, and correspondence from audits or examinations.
Why it matters: tax exposures can reduce price or delay closing; showing filings and correspondence makes potential liabilities visible so they can be priced or insured rather than discovered late.
04) Legal & Key Contracts
Include: top customer and vendor agreements, standard customer terms (for example, your MSA or online terms), debt agreements and leases, and any liens or UCC filings. Mark clauses that trigger change-of-control or require assignment consent; these are the provisions that can force renegotiations when ownership changes.
Why it matters: buyers are testing whether revenue or supply could be interrupted by the deal and whether any contract terms could erode margin after close.
05) Customers & Revenue
Include: a customer list with ARR/MRR and contract term, a concentration view for the top 10–20 customers, the renewal calendar for the next 12–24 months, your pricing and discount policy, and a pipeline report by stage with simple win/loss notes.
Why it matters: this set answers three questions quickly: how concentrated is revenue, how predictable are renewals, and where growth is most likely to come from.
06) HR & Payroll
Include: an up-to-date org chart, employment and contractor templates, key executive agreements, pay bands, variable compensation plans, immigration status where relevant, a benefits summary, and a brief history of claims or complaints.
Why it matters: buyers look for key-person risk, misclassification issues, and the practical cost of retaining your team post-close.
07) IP & Technology
Include: IP assignments from founders, employees, and contractors; registrations for patents, trademarks, and copyrights; open-source (OSS) disclosures; a high-level architecture diagram; and a list of important third-party dependencies.
Why it matters: the buyer needs to confirm that the company owns what it sells and that the technology can be maintained without unexpected license gaps or brittle dependencies.
08) Security & Privacy
Include: information-security policies, a short description of access control and change management, summaries of security incidents and remediation, backup and disaster-recovery notes, privacy notices, a simple data map (what personal data you collect and where you store it), and data-processing agreements with vendors.
Why it matters: public buyers must meet stricter SEC disclosure expectations on cybersecurity, and all buyers want to see governance mapped to the modern NIST Cybersecurity Framework 2.0, which now includes a Govern function to connect board oversight to day-to-day controls. The expanding state privacy landscape also means buyers will look for basic hygiene around data rights and vendor contracts.
09) Product & Operations
Include: a current product overview and roadmap, release notes that show cadence, service-level and support commitments, and any business-continuity procedures that matter for customers.
Why it matters: this gives the buyer a realistic view of near-term deliverables, support obligations, and operational resiliency before they commit to a post-close plan.
10) Regulatory & Compliance
Include: required licenses or permits, examination reports and responses, and any correspondence that shows ongoing remediation.
Why it matters: the buyer needs to understand approval timelines and whether staying compliant will require new systems or staffing.
11) Litigation & Claims
Include: a list of pending or threatened matters, settlement agreements, and any subpoenas or formal notices.
Why it matters: a clear summary allows legal teams to quantify tail risk and plan disclosures rather than discovering issues during confirmatory diligence.
12) Insurance
Include: D&O, cyber, E&O, general liability, property policies, and a brief claims history.
Why it matters: insurance can transfer identified risks or reduce the size of indemnities; seeing coverage early helps structure those decisions.
13) Real Estate & Facilities
Include: office or site leases and amendments, estoppels or required consents, and any property deeds if you own locations.
Why it matters: the buyer is checking for obligations that survive the deal and for permissions that might delay occupancy or operations.
14) ESG / Environmental (if applicable)
Include: applicable environmental permits, audits, and any remediation work.
Why it matters: where environmental exposure or supply-chain commitments are material, the buyer needs a clear view of long-term operating risk rather than discovering it after integration.
Confirmatory (gated until late-stage): keep sensitive schedules to the definitive purchase agreement and items that could identify individual employees or customers in the 99_Confirmatory folder; release it when you are close to signing and both sides are aligned on terms. This staged approach is standard practice and reduces negotiation noise.
How to release information without losing control
A room should not only contain documents; it should also make it clear who is allowed to see what and when. The most reliable pattern is a three-stage release: an early view with company overview and headline metrics, a shortlist view with contracts and detailed financials, and a confirmatory view with sensitive schedules right before signing. This allows serious buyers to move quickly while still protecting crown-jewel information.
Peony makes this staged approach simple and secure. With Peony's virtual data room, you can share password-protected links, add two-factor authentication (2FA) for enhanced security, set link expiry so access ends automatically, and revoke any link instantly if a bidder withdraws. You can also layer dynamic watermarks on documents to deter leaks, and require an NDA gate before anyone enters the room. These enterprise-grade controls are exactly what diligence teams expect in 2025.
If you want to prioritize your time, page-by-page analytics help you see what buyers actually read so you can answer the right questions first rather than guessing. This is especially useful when multiple bidders are active and your team needs to schedule management time carefully.
A compact, import-ready checklist
Use the bullets below to sanity-check your room. After each item, one short sentence explains the purpose so first-time reviewers do not have to ask.
- Charter, bylaws, cap table, board/stockholder consents — prove authority to transact and show who must approve the deal.
- Audited/reviewed financials, monthlies, revenue waterfalls, AR/AP aging, cohorts — demonstrate earnings quality and how reported revenue ties to actual billing.
- Tax returns, nexus map, audit correspondence — surface liabilities that could reduce price or delay closing.
- Top customer and vendor contracts, standard terms, debt, leases, lien/UCC list — reveal clauses that could change economics or require consent after a sale.
- Customer list with ARR/MRR, top-customer concentration, renewal calendar, pricing policy, pipeline — show durability of revenue and realistic near-term growth.
- Org chart, templates, executive agreements, pay bands, variable comp, immigration, benefits, claims — highlight retention risk and employment compliance.
- IP assignments/registrations, OSS disclosures, architecture, key third-party list — confirm ownership and operational feasibility post-close.
- Security policies, incident summaries, backup/DR, privacy notices, data map, vendor DPAs — map governance to NIST CSF 2.0 and address SEC-era expectations.
- Roadmap, release notes, SLAs/support processes, continuity plans — set delivery expectations and show resiliency.
- Licenses/permits, exam reports and responses — make approval needs and remediation clear.
- Litigation list, settlements, subpoenas/notices — quantify tail risk and plan disclosures.
- Insurance coverages and claims history — align risk transfer with known exposures.
- Leases, consents/estoppels, deeds if owned — confirm obligations and assignment rights.
- Environmental permits/audits/remediation (if applicable) — show long-term operating risk is understood and managed.
How Peony helps a first-time seller present well
Peony's virtual data room is purpose-built for M&A diligence. Peony lets you create a professionally branded room in minutes, bulk-upload your document packages, and share separate links for different bidders so each group only sees what they should. You can require NDA acceptance at the door, add passwords and 2FA for sensitive folders, set link expiry, and revoke access instantly if the process changes. Advanced features like dynamic watermarks and screenshot protection discourage leaks, while page-by-page analytics show where buyer interest concentrates before you schedule management meetings. These enterprise features are designed specifically for the demands of modern due diligence.
Final advice for beginners
A good room is not the one with the most files; it is the one where a buyer can form a clear, defensible view of the business without getting lost. If you use the folder tree above, add short "what's here / why it matters" notes at the top of each folder, and release sensitive items in stages, you will look prepared and you will keep control of the process. The structure in this guide is aligned with industry best practices, so you can set it up with confidence even if this is your first sale.
Ready to get started? Peony's virtual data room provides all the security, analytics, and user management features you need to execute this checklist professionally. Set up your branded data room in minutes and focus on what matters most—your deal.