A strong team and a convincing pitch are essential to secure investment deals. But a well-designed virtual data room can help startups make a great impression on investors. A virtual data room is a secure repository that allows users to share documents with other parties during due diligence, which is an important element of the investment process.
A data room online is cheaper than storing physical documents in the office and it’s easier to access for global users. Additionally, online data rooms aren’t affected by natural disasters such as fire or storms, making them a more reliable choice than physical files.
Prioritize platforms that allow various users to set their own permissions when selecting a virtual dataroom. This feature allows administrators to revoke access once a user’s role in the due diligence process is completed. The principle of least privilege ensures that the most sensitive information is provided only to those who need it to make an informed decision.
Startups can also make use of the analytics on file access to determine what documents are most frequently viewed by potential buyers and investors. This helps them to have more effective conversations and to tailor their pitch going forward.
As a general rule, avoid including personal correspondence, old marketing documents, or internal memos that do not affect the decisions of investors. Instead, concentrate on presenting important metrics that prove your startup’s success in business and potential for growth. Also, include a brief overview of the company’s longevity so that potential investors can feel confident that you will continue to succeed for the long-term.