A data room is the answer. It’s a secure location where startups can store important due diligence documents, and control who has access to the documents. A data room can be a custom-built software that enables granular permissions and expiring links. Or it could be as simple as a shared Google Drive folder.
Investors are watching your company and would like to learn more about your team, business model and traction, as well as your financials. An investor data room can improve the efficiency of the process and can help you close a deal faster. What is an investor dataroom and what exactly should it include?
In the past, if a company wanted to acquire another company, it was required to have access to the historical and financial documents of that company. These documents were usually kept in a room and the people who had a role in making decisions would go there to read them. Investors are doing the same type of work today to decide if they should invest in a company and need access to the same documents.
The most effective investor data rooms are designed in a manner that makes it simple for investors to navigate the room and understand the information. It is also important to ensure that the data that you share is useful and that the information doesn’t contradict itself. A well-organized dataroom makes the process of fundraising more efficient.