Historically in the past, a virtual data room (VDR) was a physical space that offered access to confidential documents for important business transactions that required high stakes, such as M&As or IPOs. Virtual data rooms (VDRs) are an affordable and efficient way to handle sensitive information. You can enjoy the convenience and security VDRs provide VDR offers during important business deals, regardless of the size of your organization.
During the due diligence process, prospective investors will need to look over many different documents pertaining to your business. This may include financial records as well as contracts, legal documents and intellectual property. You’ll also need to share the names of your customers and an analysis of the competition. It’s also important to include a section that outlines your team’s expertise and experience.
When you upload your documents to the dataroom, ensure that they are organized and easy-to-navigate. Create a clear structure for your folders with main categories and subfolders and standard document names and descriptions. To speed up the review process it’s useful to categorize documents that have a common theme. You can www.gooddataroom.com/what-is-the-purpose-of-a-data-room/ further organize your files by creating an overview.
Don’t share too much information because it could be overwhelming and distract potential investors. Only share data that is important for the company. In addition, you should not present an analysis that isn’t conventional and could make the investor confused (i.e. sharing just one portion of a Profit & Loss Statement instead of the whole picture). Also, ensure that you provide short messages or comments integrated into the platform, so that investors don’t have to leave the data space to contact you.