A virtual dataroom (VDR) lets you share sensitive files and documents online. Startups looking for funding can upload confidential revenue forecasts, detailed financial records and IP ownership documentation to an investor data room. This allows potential investors perform due diligence quickly and take informed decisions.
In the event that they’re looking to secure venture capital investors for their next round of funding or preparing to close an M&A transaction, startups require an investor data room to manage information and simplify the due diligence process. This tool helps simplify communication and speeds up the decision-making process during a deal.
What documents should be stored in an investor data room?
Regardless of industry, startup documents commonly saved in an investor data room are term sheets, capitalization tables as well as previous information on funding. The data room may contain technical documents such as system architecture, integrations, and product documentation that is already in place. Investors will also want to review intellectual property documents including patents, trademarks and filings.
Founders should think about setting up an investor data room in the early stages even before launching a funding round. In this way, the startup will have its historical data stored in one place and can provide it to investors during due diligence, without having to recreate the presentation from scratch. The VDR will also offer valuable analysis, such as activity tracking and audit trails, so that the startup can determine which documents are viewed by who.
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