A data room can be an invaluable tool for startups raising capital to speed up due diligence process. It will permit investors or acquirers of your company to review information and documents in a systematic manner, increasing your company’s perceived value and reducing the time required to conclude a transaction.
No matter if you are at the stage 1 or 2 your investors will need access to a range of documents. It is crucial to determine the most relevant documents and then gather, organize and label them properly. Any authorized or investor wants to spend their time sorting through a maze of documents.
A business plan, financial report Intellectual property information, incorporation and ownership details and pitch decks are a few of the most important documents. You may also want to include any previous updates for investors, as they will show that you’re a transparent and honest business.
In addition to your data rooms, it is important to be careful who you give access to. By using a virtual data space (VDR) with activity tracking will ensure that you only allow access to people who need it and keep track of how long they are spending on each document.
Startups forget that their intellectual property is valuable and should be included in a virtual data room. This could include patent filings, trademarks and even internal memos. This will show that you’re serious about your IP, and can strengthen your startup’s position in a negotiation.