Virtual data room due diligence that reads every file and cites every red flag to its page, before you sign
Every document read and every red flag cited to its page, before you sign.
See one case, screen by screen ↓Virtual data room due diligence, or VDR due diligence, is the core of the buy-side due diligence process: the buyer's review of everything a seller puts in its data room (contracts, financials, tax, commercial, ESG and HR documents), read before signing to find what changes the price. Virtual Data Room Due Diligence puts eight AI agents on the whole room in its original languages, pins cited red flags to the folder and page, has a second workstream cross-check each one, and leaves every decision to the deal lead.
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Virtual data room due diligence on a buyout, the heart of buy-side due diligence, means thousands of files in the seller's languages, a 60–90 day exclusivity window and a team that cannot read it all. The associate exports the index, splits folders by workstream and sends them to outside counsel, the quality-of-earnings provider, the ESG adviser and an HR adviser. Each reads its slice, keeps its own due diligence tracker and writes its own red-flag report. Foreign-language files wait for translation, late uploads and scans slip through, and nobody can say how much of the room was actually read.
The findings that change the price sit between workstreams. Legal sees a change-of-control clause; whether it matters depends on a customer's share of revenue in the QoE databook, which someone else is reading. Issues found days before signing become R&W insurance exclusions and special indemnities, when they could have been price, protection or a closing condition. And when the buyer owns a competitor, customer-level pricing must stay inside the clean team while everyone else works from summaries.
Estimated split for a mid-market buyout data room of about 5,000 files, by hand and with the solution.
Eight agents read every page, check each other and draft the questions; the deal lead decides every flag.
Quillfield Private Equity Fund V is buying Skarvik Logistik AB, a Swedish contract-logistics company, in Project Fjord: revenue SEK 4,520M ($429M), adjusted EBITDA SEK 680M ($64.6M), indicative enterprise value $708M. The seller's room opened on Monday, October 12 with 5,418 documents in six languages. One week later, eight days before the investment committee, here is the deal team's morning in the working solution.
Owen's home screen: 5,362 of 5,418 documents read, the other 56 explained; 14 of 47 flags await him; 30 seller questions are ready to release; 8 days to the committee. Beside it the agents report in their own words: 41 files uploaded at 07:12 are being read, the Legal agent raised a new critical flag on a privacy authority inquiry, and the Questions agent proposes closing F-32 because the missing German return is now in the room.
Report agent: “Report v3 is assembled from 33 decided flags. 14 flags still need your decision before I can add them.”
Folders 1 to 11 appear as the seller numbered them, each with its file count, how much is read and the red flags pinned where they sit. Workstream tabs filter Legal 13, Financial 9, Tax 6, Commercial 7, ESG 7 and HR 5. Owen opens folder 4.2.17, the Nordhavn Retail Group master agreement, and asks which contracts need consent. The Legal agent answers with every page cited.
Legal agent: “Change-of-control rights found in 9 documents.” Nordhavn may terminate, the revolving credit facility is prepayable, the Borås lease needs consent.
Clause 18.3 of the Nordhavn agreement lets the customer terminate on 90 days' notice within six months after a change of control, and the purchase is one. The Financial & Tax agent cross-checks it against the revenue file: Nordhavn is SEK 1,040M of SEK 4,520M FY2025 revenue, 23.0%, with an EBITDA contribution of SEK 152M ($14.4M). Playbook rule L-07, a customer above 10% of revenue with a change-of-control right, raises F-01 to critical at confidence 0.96. The Commercial agent adds that no renewal talks are planned before 2028.
Suggested treatment: “Price item: hold back $42M of the price until Nordhavn waives clause 18.3 in writing.” Report agent · you decide.
Owen chooses Price item and the reason code “Revenue at risk on change of control”. The treatment reads “Hold back $42M until Nordhavn waives clause 18.3 in writing”, and his note for the record says to raise it with the seller before the committee. He asks the Questions agent to queue Q-031 and Q-032 for release.
“Signed as Owen Hart, Deal Team Lead. The decision, reason, note and the evidence cited are written to the audit trail and flow into the red-flag report.”
The Questions agent queues Q-031, asking whether Nordhavn has been approached about waiving clause 18.3, and Q-032, on Appendix 3 volumes and prices, which goes to the clean team only. The Report agent adds F-01 to report v3 under Price items. Below, the trail shows every step the agents took to reach the flag, from the Intake agent translating the 41 pages on October 12 to the hand-off to Owen.
Report agent: “Added F-01 to report v3 under Price items: $42M holdback until a written waiver.”
The Financial & Tax agent finds SEK 118M of Q4 receivables sold under a non-recourse factoring line and left out of the net-debt bridge (F-11). The Legal agent disagrees: the factoring line is disclosed in the credit facility, so the bridge may be right. At confidence 0.78, below the 0.85 threshold, neither agent settles it; both readings are cited and the flag goes to a person.
“Confidence 0.78, below the 0.85 threshold: a person decides. Both readings are cited.”
Owen opens folder 5, real estate and environment: 512 documents, 98% read, 8 scans still being read, and two ESG flags pinned. He asks the ESG agent to summarize the ESG red flags. It reports seven, two of them critical: groundwater at the Duisburg site at 1,840 µg/l against a 200 µg/l trigger, with EUR 2.1M to remediate and no provision, and the top customer's 40% fossil-free transport target against Skarvik's 14% today. Both are mapped to SFDR adverse impacts PAI 1 and PAI 8.
The ESG agent never scores a company without a cited source.
The crew and the team have drafted 64 seller questions and merged 12 duplicates across workstreams. Each is tied to its flag and routed to the adviser whose scope it is: Calder & Voss for financial and tax, Ashby Kerr for legal and HR, Brightwater for ESG, and questions for the seller itself go out through the seller's data room. When the seller answers, the Questions agent reads the new files and proposes to close or escalate. For Q-016 it proposes closing F-32 because the German trade-tax return is now in the room.
Questions agent limit: never releases a question; a person does.
Intake shows the room connected read-only, synced every 15 minutes, 214 exact copies collapsed and the reading pipeline from 5,418 received to 5,362 read by the workstream agents. The 56 not yet read are each explained: 41 new uploads being read, 12 scans re-read at 600 dpi, and 3 password-protected transfer-pricing files that cannot be read, so a question goes to the seller.
Report v3 is assembled from 33 decisions: a summary, price items, SPA protections, closing conditions, the 100-day plan, flags with the seller and a coverage statement, every line cited. Leah Moreno has reviewed it. Owen signs as deal lead, Daniel Okafor co-signs as legal counsel after him, and the report goes to the committee through the deal CRM. The 14 flags still open go into v4 once they are decided.
Coverage statement: “5,418 of 5,418 documents read or explained.”
The same data room, seen by five of the people who carry the deal to signing — what diligence looked like, and what it looks like now.
Eight agents read every page, check each other and draft the questions; the deal lead decides every flag.
Connects to the seller's room read-only, extracts text from scans, detects the language, translates, removes duplicates and watches for new uploads.
Reads contracts, corporate, financing, real estate, litigation and data protection documents for change of control, assignment, exclusivity and caps, against the firm's playbook.
Reads the QoE databook, revenue by customer, add-backs, working capital, debt-like items, tax audits and transfer pricing, and sizes other workstreams' flags.
Reads customer and supplier contracts, pricing, renewals, churn and the management presentations, and recognizes competitively sensitive pages.
Reads environmental surveys, permits, emissions, safety and human rights material, and maps findings to SFDR adverse impacts and EDCI metrics.
Reads employment contracts, collective agreements, contractors, pensions and key-people terms.
Drafts seller questions from flags, merges duplicates, routes each to the right adviser, reads the answers and proposes to close or escalate.
Assembles the cited red-flag report and the SPA issues list from the deal lead's decisions, and writes the coverage statement.
Decide, release, sign. The agents propose; a named person decides.
Ask what could move the price, what is unread or what the ESG picture is, or tell the agents what to draft. Every answer points to the page.
Which flags could change the price?
Four critical flags are open and could move the price: F-01, the top customer may terminate on a change of control, 23.0% of revenue; F-02, SEK 31M of recurring add-backs; F-03, a PLN 14.2M Polish tax assessment not disclosed; F-04, EUR 2.1M of Duisburg remediation.
Is anything in the data room still unread?
5,362 of 5,418 documents are read. The other 56 are explained: 41 uploaded at 07:12 today are being read, 12 scans are being re-read at higher resolution, and 3 transfer-pricing files are password-protected, so the Intake agent drafted Q-047 for the seller.
Draft the seller questions for the Nordhavn clause
Done. Q-031 asks whether Nordhavn has been approached about waiving clause 18.3; Q-032 asks for Appendix 3 volumes and prices, for the clean team only. Both wait for your release.
Summarize the ESG red flags for the committee
Seven ESG flags; two critical. Duisburg groundwater shows 1,840 µg/l of hydrocarbons against a 200 µg/l trigger, EUR 2.1M to remediate, with no provision. Nordhavn requires 40% fossil-free transport by 2028; Skarvik is at 14%. Mapped to SFDR PAI 1 and PAI 8.
13 screens from the working solution, on its sample data. Pick one to see it large.
The red-flag rules, thresholds and data rules are settings, versioned and approved: the platform administrator changes them and compliance approves.
| Setting | Default | Choose from |
|---|---|---|
| Red-flag playbook | v4.2, approved by the deal lead and compliance | Each rule on or off, with its severity and cross-checking workstreams |
| Customer with a change-of-control right | Above 10% of revenue → critical | Cross-checked by Legal + Financial |
| Tax assessment not in the disclosure letter | Above $1M → critical | Cross-checked by Tax + Legal |
| Materiality | $1M or 1% of EBITDA | Flags below this go to the register as medium |
| Confidence threshold | 0.85 | Below this, a person reviews the flag before the deal lead |
| Bulk decisions | Never for critical flags | Locked by policy |
| Data residency | EU (Stockholm region) | EU (Stockholm region) · United States (Virginia) · Singapore |
| If the deal ends | Destroy seller material within 30 days, with a destruction certificate | Retention after close: 7 years · 10 years · legal hold suspends deletion |
Every figure is labelled: a target the solution is built to, an estimate, a typical published result, or a proven one.
“demo” = seen in the working solution, on its sample deal data · “target” = the design goal, measured in the live solution · “estimated” = our estimate · “typical” = published figures (virtual data room providers' diligence cost and timeline guides, vendor, 2026 — external diligence at about 0.2–1% of deal value on $100M+ deals, a 4–6 week diligence phase; a Q2 2026 study of M&A data rooms, vendor — about 3,993 files in a typical $100M–$500M deal room). Swedish kronor, euro and zloty amounts are shown as the working solution shows them, with US dollars where it gives them. People, firms, funds, advisers, companies and deals named on this page are fictional — characters and sample data in the working solution.
Virtual data room due diligence, or VDR due diligence, is the core of the buy-side due diligence process: the buyer's review of everything a seller puts in its data room (contracts, financials, tax, commercial, ESG and HR documents), read before signing to find what changes the price. Virtual Data Room Due Diligence puts eight AI agents on the whole room in its original languages, pins cited red flags to the folder and page, has a second workstream cross-check each one, and leaves every decision to the deal lead.
A red flag due diligence report lists the issues that matter for the deal, not a full description of the target. Here the Report agent assembles it from the deal lead's decisions, in sections for price items, SPA protections, closing conditions, the 100-day plan and flags still with the seller, with every line cited and a coverage statement. The deal lead signs it and legal counsel co-signs.
An Intake agent reads and translates every file; Legal, Financial & Tax, Commercial, ESG and HR agents raise flags against your red-flag playbook. Each flag is sized by an agent from another workstream: a change of control clause, for example, is checked against the customer's share of revenue. A Questions agent drafts the seller list and a Report agent builds the report. The agents never decide, release or sign.
Yes. Every folder shows how much of it is read, and every unread file is explained: new uploads being read, scans being re-read, password-protected files turned into a seller question. The report carries a coverage statement, such as “5,418 of 5,418 documents read or explained”.
Yes. Here ESG due diligence in private equity happens in the same data room review: the ESG agent reads environmental surveys, permits, emissions, safety and human rights material, and maps its findings to SFDR principal adverse impacts and EDCI metrics. It never scores a company without a cited source.
The Commercial agent recognizes competitively sensitive pages, such as customer-level pricing, and fences them to the named clean team, whose membership compliance approves. Everyone else sees aggregated, cited summaries, and every view, including a blocked attempt, is logged.
Yes. The deal lead accepts or rejects every flag with a reason code, critical flags can never be accepted in bulk, seller questions are released only by the deal lead, and the report needs two signatures. Agent and model changes are proposed by the administrator and approved by compliance.
The Agentic Solution Engine builds and deploys it from your requirements and documents — your red-flag playbook, materiality rules and the data room of a past deal — and it goes live once every quality gate has passed. We will walk you through it on one of your own deals first.
Every KPI cited to its page, every covenant tested the day the pack lands.
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1-min demoWe'll run Virtual Data Room Due Diligence on the data room of one of your past deals.