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One row per question, with the columns that keep bidders, the seller and counsel on the same version.

Type
Template
Deal stage
Due diligence
Use it
From the first bidder question to signing, whether or not the data room has its own Q&A tool.
Who
One person on the deal team, every day.

Run it as a record, not a to-do list

The Q&A log is the record of what the seller told each bidder. It shows who is waiting on whom each morning, and it can end up standing behind the warranties.

If your data room has a built-in Q&A tool, the columns and rules below still apply. What matters is that one person owns the log and that nothing reaches a bidder any other way.

  1. 1Before the first question

    Deal lead

    Agrees the route for questions, a daily cut-off and one release time, and puts them in the process letter.

  2. 2Every morning

    Log owner

    Logs and splits new questions, sets priority and owner, and sends the status note.

  3. 3During the day

    Seller's team

    Drafts answers and uploads the documents, one named owner per row.

  4. 4Before each release

    Deal lead and counsel

    Read every answer, and check anything on warranties, litigation, tax or people.

  5. 5Near signing

    Counsel

    Decides how the log relates to disclosure, and fixes it at a date.

A question passes through several hands before it becomes a record

Most Q&A trouble comes from a step being skipped under time pressure: an owner who answers a bidder directly, or an answer released without a second reader. Keep every question on this path, including the easy ones.

Exhibit 1

Every question follows one path, and only a released answer reaches a bidder

Life of a question on a sell-side process, by who holds it, with the Status value at each step. Turnaround is set in the process letter.

  1. 1

    AskedBidder

    Through the agreed route only. Status: New.

  2. 2

    LoggedDeal team

    Split, priority and owner set. Status: With owner.

  3. 3

    DraftedSeller's owner

    Answer and document found. Status: With owner.

  4. 4

    ReadDeal team

    Deal lead reads every answer. Status: In review.

  5. 5

    ClearedCounsel

    Warranties, litigation, tax, people. Status: In review.

  6. 6

    ReleasedDeal team

    Audience set, at the set time. Status: Released.

  7. 7

    ReceivedBidder

    A follow-up is a new row. Status: Released.

Note: Counsel clears only answers on warranties, litigation, tax or people. Anything else moves from Read to Released.

Note: A declined question leaves the path at Read: the reason is recorded, and it stays in the log.

Source: Verdalyze sample process.

The log, filled in for a sample mandate

Sample rows, using code names. Pastes into Excel or Google Sheets with its columns intact. Delete the sample rows and start at Q-001.

Project Harbour Q&A log, as at 9 March

RefBidderWorkstreamIndex refQuestionPriorityAskedOwnerStatusAnswerReviewed byReleasedSeen by
Q-001Bidder AFinancial2.5Please provide monthly revenue by customer for the last full year and the year to date.High3 MarFinance leadReleasedSee 2.5, updated to last month end. Customer names are anonymised at this stage.Deal lead5 MarAll bidders
Q-002Bidder ALegal4.5Do any of the largest customer contracts contain a change of control clause?High3 MarSeller's counselIn review
Q-003Bidder BTax3.5Has any tax authority enquiry been open during the review period?Normal4 MarTax adviserWith owner
Q-004Bidder BCommercial4.2Please provide price by customer for the largest accounts.High4 MarDeal leadDeclinedAvailable to a clean team at final round.Deal lead5 MarThis bidder
Q-005Bidder AFinancial2.3Follow-up to Q-001: what drove the one-off cost added back in the last full year?Normal5 MarFinance leadReleasedThe site closure. Support is at 2.3.Deal lead7 MarAll bidders
Q-006Bidder CPeople5.2Please provide headcount by role and location.Normal5 MarHR leadReleasedSee 5.2, anonymised census at last month end.Deal lead6 MarAll bidders
Q-007Bidder CFinancial2.6What is the normal level of working capital through the year?High5 MarFinance leadIn review
Q-008Bidder AIT7.4Have there been any security incidents in the review period?Normal6 MarIT leadWith owner
Q-009Bidder BLegal8.1Is any litigation open or threatened?High6 MarSeller's counselReleasedOne claim, disclosed at 8.1.Seller's counsel7 MarAll bidders
Q-010Bidder CCommercial4.5Does the largest supplier contract contain a change of control clause?Normal6 MarSeller's counselWith owner
Q-011Bidder BFinancial2.7Please reconcile net debt to the last balance sheet.High7 MarFinance leadWith owner
Q-012Bidder APeople5.6Are any contractors working under off-payroll rules?Normal7 MarHR leadReleasedSee 5.6.Deal lead8 MarAll bidders
Q-013Bidder CTax3.4Please provide the last R&D relief claim.Normal9 MarTax adviserNew
Q-014Bidder ALegal6.1Please confirm the lease terms on the main site.Normal9 MarSeller's counselNew

The log should tell you where the deal stands each morning

Send this to the deal lead and the seller before the working day starts. It takes minutes once the log is clean, and it shows what no single row can: which workstream is stuck, and whether the high-priority questions are moving.

Exhibit 2

Morning status: 5 of 14 questions released, 1 declined and 3 high-priority questions still open

Morning status from the Project Harbour Q&A log on this page. Number of questions, as at 9 March.

WorkstreamNewWith ownerIn reviewReleasedDeclinedTotal
Financial-112-4
Legal1-11-3
Tax11---2
Commercial-1--12
People---2-2
IT-1---1
All2425114

Where the 14 questions sit

  • New2
  • With owner4
  • In review2
  • Released5
  • Declined1
Q-002 Seller's counsel, in review
Do any of the largest customer contracts contain a change of control clause?
Q-007 Finance lead, in review
What is the normal level of working capital through the year?
Q-011 Finance lead, with owner
Please reconcile net debt to the last balance sheet.

Source: Sample data. Project Harbour and every company, customer and vendor shown are invented. Counts are computed from the log on this page.

Each column, and how it goes wrong

ColumnWhat goes in itExampleHow it goes wrong
RefA running number that never changes.Q-005Reusing a number after a question is deleted. Nothing is ever deleted.
BidderA code name, never the buyer's name. The seller's team works from codes too.Bidder AUsing real names in a log the seller's whole team can read.
WorkstreamHow a question reaches the right adviser.FinancialAdding new categories mid-process, which breaks the status view.
Index refThe line in the data room index this relates to.2.3Leaving it blank. A pattern of blanks points to a gap in the data room.
QuestionThe bidder's own words. One question only.Is any litigation open or threatened?Tidying the wording, so the log no longer shows what was asked.
PriorityHigh if it could change price or terms. Bidders propose it, you confirm it.HighAccepting every bidder's High, so the word stops meaning anything.
AskedThe date received. This starts the clock on your turnaround.6 MarLogging the date you got to it, which hides your real turnaround.
OwnerOne named person on the sell side, not a team.Finance leadAssigning a workstream instead of a person.
StatusNew, With owner, In review, Released or Declined.In reviewLeaving a question open once it has been answered by another route.
AnswerThe exact wording released, with an index ref wherever a document does the job.One claim, disclosed at 8.1.Keeping a draft here after release, so two versions exist.
Reviewed byWho approved the wording. Counsel as well for warranties, litigation, tax or people.Seller's counselFilling it in afterwards, from memory.
ReleasedThe date it went out.7 MarConfusing the draft date with the date a bidder received it.
Seen byThis bidder or All bidders, decided before release.All biddersGiving one bidder a fact the others never receive.

Eight rules that keep it clean

  1. 1

    One question, one row.

    Split a bundled question on arrival, so each part has one owner and one status.

  2. 2

    Keep the bidder's wording.

    Never tidy a question. If it needs clarifying, add a row. The log has to show what was actually asked.

  3. 3

    Nothing goes out unread.

    The deal lead reads every answer. Anything on warranties, litigation, tax or people also goes through counsel.

  4. 4

    Decide who sees each answer.

    A fact about the business usually goes to every bidder, so nobody works from a different file. Strip anything that shows which bidder asked or what it is worried about.

  5. 5

    Answer with documents.

    Put the document in the data room and cite the index ref. A document can be checked. A sentence has to be trusted.

  6. 6

    Set a rhythm.

    Agree a daily cut-off for questions and one release time, and put it in the process letter. The seller's finance team still has a business to run.

  7. 7

    Never overwrite a released answer.

    Issue a correction as a new row that cites the old ref, and send it to everyone who saw the original.

  8. 8

    Settle with counsel how the log will be used.

    Whether released answers count as disclosure against the warranties depends on the sale agreement. Agree it early, because it changes how every answer is written. This template is not legal advice.

How good teams still get this wrong

The mistakeWhat it costsDo this instead
A seller's manager answers a bidder on a call.Facts reach one bidder and not the others, with no record.Log every call follow-up as a question, and answer it through the log.
Answering in the order questions arrive.Price-sensitive questions wait behind easy ones.Sort by priority each morning, and review the high items first.
Letting answers drift between bidders.Two bidders compare notes, or their advisers do, and the seller looks unreliable.Reuse released wording, and search the log before drafting.
Answering beyond the question.Volunteered detail creates new questions, and sometimes new exposure.Answer what was asked, with the document, and stop.
Keeping the log in email.Nobody can say what was released, when, or to whom.One log, one owner, one route.

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