If you’re looking to raise funds or simply making sure your business has all the data necessary to succeed using a virtual data room is crucial. It not only helps you organize and keep your files in a secure space and also helps streamline the due diligence and valuation process.
Investors and acquirers will want to get as the information they can during due diligence to determine if the startup is worth investing in. If the company isn’t able to provide this information, the process could be delayed and could even derail the deal. It is crucial to set up an investor data room prior to seeking investment.
The specific contents of the investor data room can vary depending on your company’s size and the complexity. One approach is to create folders for specific types of information or stages. Within these, you can create subfolders in order to organize your files into easy-to-use types of structures.
Another factor to consider is the security level of each file. To ensure the security of sensitive information, it is recommended to set the permissions in granular ways. Certain providers offer group rights settings that let you give access to entire departments or specific professional groups such as accountants and investment bankers. This can significantly simplify the process of granting access to appropriate individuals and improve the efficiency of the process. This is particularly important when a startup is going through multiple rounds due diligence or is preparing the possibility of selling.