George engages Marcus in a detailed discussion of the use of virtual and physical data rooms to facilitate sophisticated M&A transactions. Marcus describes the nuts and bolts of the M&A due diligence process, specifically describing the way the Shenas firm organizes information and manages disclosure of that information to the seller. George asks Marcus to explain why it might be in a company's interest to compile the same information before even engaging in formal merger discussions with a third party. To illustrate better the practical application of due diligence principles, Marcus, speaking from experience, gives several concrete examples involving three different subject areas: intellectual property, material contracts, and financial data. By the time a seller gets to the stage of actually negotiating the purchase agreement, the parties have largely formalized their relative positions; accordingly, a savvy seller can stake out a much more favorable position as the formal document begins to take shape by understanding these due diligence principles and working with legal counsel from the very beginning. George emphasizes that a company's financial data should be presented in a way that comports with industry-wide best practices, including compliance with accounting standards that are defensible when scrutinized by a buyer and their advisors.