A virtual data room is a vital instrument for startups to help with their due diligence process. It provides potential investors with an easy and complete overview of the company which can speed up the process and result in higher investment offers.
Investors conduct thorough research on companies that are just starting out before investing, in order to reduce the risk. As early-stage investments can be high-risk, it is essential that investors have access to a complete and current picture of the firm’s assets as well as liabilities. In the past investors would examine documents and financial data in chambers. Today this process is much more efficient with an online data room.
A data room for investors enables entrepreneurs to present an integrated story of their business by providing organized and accessible files. The platform’s central access, search capabilities as well linked here as indexing and labels facilitate an efficient and faster due diligence process. This makes it easier to streamline the fundraising or acquisition process and decreases the time spent offering easy-to-use navigation tools to investors.
Investor decks, pitchbooks, and whitepapers are a few documents that should be part of the startup’s data room. Other important documents include articles of incorporation, cap tables, investor rights agreements and onboarding documentation. The data room should include the intellectual portfolio of the startup, which includes trademarks, patents and other legal documents. Moreover, it is important to include HR documents as well as the names of employees to provide an insight into the startup’s workplace culture and hiring process.
