Diligence Ready keeps the work done in advance. So when the term sheet lands, you're not preparing: you're already prepared.

A useful next step: start your data room early. Setting it up before a buyer asks saves a scramble later. A diligence room gives you a checklist by category, a what's-missing list, and files that can stay in your Google Drive or OneDrive. You can give your Trusted Advisor access scoped to the engagement. The Founders plan includes 1 data room free.

What sell-side due diligence is

On the sell side, you are the company (or the advisor running the book) answering a buyer's diligence request. The job is to show ownership, financials, contracts, and IP in an organized place, not to assemble a weekend folder dump after the offer lands.

How to prepare for due diligence when selling your business

Prepare before a buyer asks. Organize ownership, financials, contracts, and IP in one place, starting with five categories: corporate and formation, cap table and equity, financials and tax, material contracts, and IP assignments. Make the cap table tie out first, tie each file to the record it supports, and keep a what's-missing list so you close gaps first.

  • Add employment and equity documents, plus board minutes and consents, to the core list. The due diligence checklist covers each category.
  • Expect an acquisition review to ask for more history and more detail in every category than an investor in a round would.
  • Many owners bring in a Trusted Advisor they already work with, such as a fractional CFO, an accounting firm or CPA, or a law firm, with access scoped to the engagement.
  • Request lists vary by deal, so treat any list as common categories, not a fixed or legally complete list. Keeping the checklist current makes opening the room a permission you grant. See how to get diligence-ready.

Why the scramble kills deals

When the room opens cold, weeks vanish into hunting for documents, reconciling numbers, and answering the same questions twice. Momentum stalls, and a stalled deal is a deal at risk.

A practical request list

Start with the live diligence categories Diligence Ready uses:

  • Corporate & formation
  • Cap table & equity
  • Financials & tax
  • Material contracts
  • IP assignments

The room is a what's-missing list

A live list of what's complete and what's still missing, so you close the gap before an investor ever finds it. Reviewers see an organized index, not a folder dump. Here's how the diligence room works when a buyer starts asking.

Files stay in your Drive

Files can live in your Google Drive or OneDrive, your policies, your backups, your permissions, while the room organizes and references them.

Open with What-If before price talks

Price the next round, refresh the option pool, or run an exit waterfall against your live cap table in minutes. Then show what is still missing. The cap table is the ledger under that work.

Exit planning: the documents buyers ask for

Exit planning means getting a business ready to sell or hand off, often well before a buyer appears. Much of that work is paperwork. A buyer will ask to see it, so it helps to collect it early and keep it current.

Start with the same five categories as the due diligence checklist. The documents under each are common examples of what buyers ask for, not a complete list:

  • Corporate & formation. Formation documents, bylaws or operating agreement, and board minutes and consents.
  • Cap table & equity. A cap table that ties out to the signed documents behind every grant and share issuance.
  • Financials & tax. Financial statements and tax returns for the years a buyer will review.
  • Material contracts. Key customer, vendor, and lease agreements, including any terms that change if the company is sold.
  • IP assignments. Signed assignments from founders, employees, and contractors.

Plan for the time it takes. In its seller due diligence checklist, CT Acquisitions, an M&A advisory firm, estimates that a typical lower-middle-market business takes 80 to 200 hours of internal effort to fully prepare its data room. The firm also says that preparing only after the letter of intent is signed almost always means 30 to 60 or more days of delay and an 8 to 15% lower transaction value.

Keep a what's-missing list so you can see which documents are still open. Request lists vary by deal, and this is not tax or legal advice.

Working with a sell-side advisor

Sell-side advisory is the work of helping an owner get a company ready for a sale and then run the process. Many owners bring in help for it. Often that help comes from Trusted Advisors the company already works with: a fractional CFO, an accounting firm or CPA, or a law firm. Angel groups and PE firms that backed the company may want it ready too.

Whoever runs the book, the advisor and the company can work from the same room:

  • Access the company grants. The company approves the advisor's access, can set an expiry, and can revoke it any time.
  • Scoped to the engagement. Access is walled off per client, so the advisor reaches only what each engagement allows.
  • Read-only or write. The advisor works in the mode the engagement allows, and every action is attributed and timestamped in the company's audit log.
  • One dashboard across clients. An advisor who carries more than one company sees readiness and open items for all of them in one place.
  • Co-branding on Standard. On the Standard plan, the portal can carry the advisor's firm brand.

Files can stay in the company's Google Drive or OneDrive while the room organizes them.

If you advise more than one company, see For Trusted Advisors. For related topics, browse all Learn guides.