A data room is an online platform that allows for sensitive information exchange during due diligence. Data rooms are great for any high-risk business venture whether you’re planning an M&A deal, closing an investment or helping to facilitate another high-risk transaction. Users can easily access and share documents while maintaining the security of the files.
Investors should review important corporate documents during the due diligence phase. This includes reviews of contracts, shareholder agreements, etc. If the information is exchanged via shared drives or email it can be a laborious and difficult to. Virtual data rooms allow the legal departments and other stakeholders to work in a secure manner on crucial documents.
As a founder, it’s essential to understand what investors are looking for from your data room, in order to deliver quickly and efficiently. There are a few key elements you can put in your data room to help you stand out.
1. Team Information
One of the most common requests from investors is for an inventory of current team members and their job titles. This can help speed up the process if you can provide the information in a short section.
2. Competitive Analysis
Investors will also likely be interested in knowing your competitor’s official source strengths and weaknesses. If you can provide a consolidated competitive analysis of your top competitors in your data room, it will demonstrate your depth of research and help accelerate the process.
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