Best Practices for Findings in DealRoom

If you're accustomed to using RAID logs, then navigating our Findings feature in DealRoom will feel like second nature. It's a tool designed to track and organize risks, issues, actions, and decisions. This simplifies and centralizes documenting any challenges that arise during a project under due diligence, facilitating early involvement of your integration team to preempt obstacles and address them proactively.

New to using the Findings feature in DealRoom or seeking step-by-step guidance? Check out our introductory article: How do I use findings?

Note: Admins control access to the Findings feature. If it's not visible to you, reach out to an admin to request access.

Once you're familiar with Findings in DealRoom, consider these 3 best practices to optimize your M&A process:

1. Customize your Findings

Custom Finding types

While standard RAID logs typically include types like Risk, Action/Assumption, Issue, and Decision, DealRoom empowers you to customize or create additional types that align with your workflows. Here are some suggestions:

Decision
Dependency
Info/Informational (for information you'd like to note)
Issue type (i.e. Post-close issues, Diligence issue)
Opportunity
Priority
Synergy

Custom Finding statuses

In traditional project management, common statuses are Open, In Progress, or Closed. DealRoom enables you to define custom statuses, enhancing your operational efficiency. Consider these alternatives:

Accepted
Mitigated
Owned

Custom Finding Fields

Some of the default fields you can track are status, severity, likelihood, and mitigation plan. But now with custom fields, you can track additional information that is completely customizable to your workflows! Some examples include:

Relevance
Impact
Departments affected

For more information on how to create these, please refer to this article: How do I use Findings custom fields?

2. Create Cross-Functional Collaboration with Findings

In the due diligence phase, crucial insights emerge that can significantly influence the evaluation process and subsequent purchase decisions, as well as shape integration planning. Findings provide a secure platform for your teams to collaborate on these critical items in real time, without the seller's involvement or visibility.

This collaborative environment enables stakeholders from various departments and functions to assess findings, discuss implications, and devise strategies for deal evaluation and post-close activities. By engaging in proactive discussions early on, teams can anticipate potential challenges, evaluate their impact, and formulate action plans before integration efforts are in full swing.

Example:

During the diligence process, the HR/payroll documentation reveals several concerning red flags that could potentially pose significant issues. However, due to compliance regulations, the team cannot grant access to this sensitive information to other users.

In such a situation, the diligence team can utilize Findings effectively. By creating a "Risk" type Finding specifically addressing these concerns and linking it to the HR category in the Diligence or Integration Worklist and they can collaborate seamlessly with appropriate teams without compromising compliance or exposing sensitive data to unauthorized personnel. This approach ensures that critical issues are flagged and addressed appropriately, while also maintaining the necessary confidentiality and security measures required by compliance regulations.

Note: Users can only see findings tied to requests they have access to. Since a finding can be tied to multiple requests, several departments can collaborate on the finding without seeing the other requests and sensitive information the finding is tied to.

3. Utilize Findings for Diligence Follow-up Questions

Problem: During the due diligence phase of a project, managing follow-up questions effectively can pose significant challenges. Typically, teams compile a list of questions for the target in an Excel tracker or a similar format. However, as the diligence process unfolds, new questions may arise from various team members, departments, or workstreams.
This iterative process can lead to confusion, duplication of efforts, or overwhelming the target with multiple requests.
Users might accidentally put new requests or questions that haven't been reviewed in the diligence list that the seller has access to.
As an admin, you may want to be able to review and approve questions before submitting them to the seller.

Solution: To address these challenges, leverage the Findings feature in DealRoom as a centralized platform for managing follow-up questions. Instead of allowing team members to independently submit additional requests in the main Requests tab—where the target can view them directly—direct them to use the Findings tab. By doing so, several benefits emerge:
Transparency: Before a follow-up question is finalized and submitted to the target, stakeholders can add comments, seek clarifications, or provide approvals. This transparent process enhances communication and reduces the likelihood of misunderstandings or misinterpretations.
Traceability: Each follow-up question is attributed to its submitter, providing clear accountability and enabling tracking of the question's origin.
Contextualization: Findings can be linked directly to the relevant diligence question, providing context and facilitating better understanding for both internal team members and the target.
Collaboration: Findings support multi-party collaboration and communication. Team members can discuss and refine questions within the platform, ensuring clarity and coherence before submission.

Example:

As a Corp Dev Lead, ensuring streamlined communication and oversight in the diligence process is paramount. I want my functional teams to have the flexibility to pose new diligence questions while maintaining control over the approval process before presenting them to the seller. To achieve this, I implement a structured approach:

Permission Management: I disable my team's permissions to create new requests and instead grant them access to Findings.
Creating Findings: This enables my team members to easily create Findings specifically tied to the diligence request they have additional questions about. They can outline their queries within the Finding, providing me with visibility and the opportunity to review and approve them.
Review and Approval: Upon receiving a Finding, I review its contents and determine whether to proceed with creating a new request. Once approved, I create the new request and tag the Finding accordingly, ensuring my team can easily track their questions and the corresponding responses from the seller.

As a Diligence Team Member, having the ability to request additional information promptly is crucial for thorough due diligence. Here's how I navigate the process:

Identifying Information Gaps: If I require further clarification or information beyond what is provided in the original request, I initiate the process by creating a Finding.
Proposing Questions: Within the Finding, I articulate my additional questions and tie them to the relevant diligence request. This ensures clarity and context for the Corp Dev Lead during the review process.
Corp Dev Lead Review: After submitting the Finding, I assign it to the Corp Dev Lead for review and approval. Their prompt assessment is crucial for expediting the process.
Actionable Insights: Once the Finding is approved, the Corp Dev Lead creates a new request and links the Finding to it. This seamless integration allows me to promptly follow up with the seller, armed with the necessary information.

To configure your team's permissions effectively:

Ensure your team retains the ability to communicate with the seller on requests and manage request parameters.
Disable their access to creating new requests.
Grant them access to creating Findings, facilitating the submission and approval of new questions.



By implementing these measures, you ensure efficient communication, thorough review processes, and informed decision-making throughout the diligence phase.

Relevant Articles:

How do I use findings?
How do I set permissions?

Updated on: 02/07/2024