Data rooms allow businesses to securely exchange sensitive information in business transactions and to simplify intricate procedures. A virtual space that is well-organized can help you accelerate due diligence and decrease the chance of misuse of information, regardless of whether you’re planning for a fundraising campaign or closing an acquisition.
Your data room should include more than the basic documents such as a deck term sheet, and cap table. It should also contain complete financial records as well as projections of revenue IP ownership documentation, with other essential information to help investors understand the growth potential of your business. Having these documents organized in your data room will increase investor confidence and speed due diligence and increase the chances of closing the deal.
Ensure that your data room is easily navigable by including an index and/or table of contents document that includes links to various sections. It’s also important to clearly label your folders and documents with clear, descriptive titles to ensure they are clear for those who visit https://vdrdeluxe.com/what-documents-does-a-data-room-contain/ the data room. Avoid sharing non-standard analyses (e.g., only showing the portion of a Profit and Loss statement) since this can confuse potential investors.
It’s also important to check and update the data in your data room. This will improve transparency and accountability while decreasing the possibility of accidental disclosures. Also, a periodic review can provide insight into the activity of your users in your data room (i.e., who accessed what and when) which is useful for compliance purposes. Also, consider adding watermarks on files you plan to share outside of your data room to reduce the risk of unauthorized modifications to files or theft.
