A startup’s data room is a kind of virtual repository that helps in the management, communication and processing documents with the aid of an encrypted platform. It is typically used for due diligence and aids fundraising efforts for startups. Generally, the information that is shared in a data room contains documents of the company’s organization, pitch decks financial data, market information and documents relating to people. However, a startup should be cautious about sharing proprietary information like code or trade secrets in the data room in order to ensure security of the data.
Investors can search for any document or item within the data room, however it should be clearly labeled and easy to make it easier for them to find specific items. It is also a good idea to divide the various data into stages. For instance, a stage one data room could include things like pitch decks, strategy documents and product plans that give investors an overview of your company. On the other hand, a stage 2 data room can contain http://www.affordabledataroom.com/due-diligence-checklist-for-virtual-data-room-preparation more sensitive information such as legal agreements and HR related documents.
It is also a good idea include any customer references in the data room as this can be a major decision-maker for certain investors. This will spare investors the time of calling these customers as they can read the notes in the data room. It is also important to include any information regarding intellectual property in the data room, as it is a vital area that VCs are looking for. This includes trademarks, trademark numbers, and patent filings.