A digital investor data room makes it simpler to share sensitive information with investors, speeding the capital raising process and building trust. With features such as granular permissions, password protection, and watermarking, it helps keep documents safe from accidental or intentional leaks. It is also useful for conserving and archiving documents and allowing users to access the files even after the transaction has been finished.
During due diligence, investors search for crucial legal documents, like the company’s overall business plan and financial projections. Incorporating these documents into the virtual data rooms helps investors evaluate the startup’s potential and gives them an overview of their investment. In the virtual data room are other crucial documents, such as audit reports, penetration testing reports and other documents that demonstrate compliance with regulatory requirements. Investors can review the company’s compliance with data protection regulations and cyber standards. This will allow them to mitigate security risks and ensure that they’re investing responsibly.
It’s also helpful to present investors with key performance metrics and growth reports. The inclusion of these reports in the data room proves that the company is accountable and can be respected by investors. It’s a good idea include a section about the startup’s sustainability plans which can give investors an idea of the future and let them know how they plan to make their operations sustainable.
Additionally, some founders decide to separate the different types of information within their investor data rooms based on the stages. This lets them send relevant documents to every investor at the right moment, thereby reducing time and ensuring that important details are not overlooked.