A data room can be a valuable tool for startups seeking capital to speed up the due-diligence process. It allows buyers or investors to examine your company’s data and documents in a structured way, increasing the perceived value of your business and reducing the amount of time it takes to conclude a deal.
It doesn’t matter if you’re in the stage 1 or 2 your investors will need access to a range of documents. It is essential to find the most pertinent documents and then collect, organize and label them appropriately. No authorized or investor wants to sort through a plethora of documents that just waste their time.
A business plan, financial report Intellectual property information, ownership and incorporation information, and pitch decks are some of the most important documents. It is also possible to include previous investor updates, since they demonstrate that you are a transparent and honest company.
You should also be careful about who you grant his response access to. You can keep track of the time you spend on each document by using a virtual dataroom (VDR) that includes activity reporting.
Startups often forget that their intellectual property is valuable and should be included in a data room as well. This includes trademarks, patent filings and internal memos. This will show that you care about your IP and strengthen the position of your company during negotiations.