A data room is a safe virtual space where companies can store confidential information related to high-risk business transactions. These include mergers, acquisitions and initial publicly-traded offerings (IPOs) and fundraising rounds. The data rooms permit authorized individuals — such as due diligence teams and investors — to review and evaluate sensitive information without sharing the original files.
Create a clear folder structure in your data room. You should clearly label your documents to make it easier for others to understand and access your data. This will allow prospective buyers and investors to find the information they need to make informed decisions. It helps to keep your data organized and prevents potential mistakes.
Some startups divide their investor data room into different documents depending on where they are in the process. For instance deadbeats.at/ when you’re making your first investment, you may want to keep certain information secret until you’ve confirmed that an investor is interested in moving forward.
It’s tempting for you to share as much information as possible. But, the information you share must be part of your overall story. The narrative you tell will differ based on the stage of your business but it must always include the main forces that are driving your current success. For instance, a young startup could focus on trends in the market or regulatory changes and your team, while a growth-stage company might highlight customers’ references, revenue growth and product growth.
