A secure, easy-to-use virtual data room is essential for any startup looking to speed up its fundraising process. But creating the right VDR isn’t without problems. The most common mistakes can be avoided by ensuring the following best practices are in place:
Too many details
It’s tempting to include every piece of relevant data you need to provide in the stage 1 data room. However, this can distract investors and may dilute the significance of important information. It’s also important to remember that not all data is equally valuable. For example, investors at stage 1 do not need access to cap tables or shareholder certificates.
Poor document structure
Ensure your files are properly labeled and organized prior to uploading them to the VDR. This will help the acquirers comprehend the contents and structure https://otherboardroom.com/board-software-pricing-hidden-costs-and-budgeting-tips/ of the document more easily. For instance, an organized filing system that has consistent file names and the use of tagging and indexing systems will help users to locate files. The use of summaries and outlines can assist users in understanding complicated documents. Finally, establishing clear protocol to eliminate old files will reduce clutter and enhance the overall user experience.
Overstating security
Some companies go overboard by claiming that their secure data rooms are extremely secure. It’s like a food manufacturer boasting about the nutritional value of their cereal bar as it has zero fat when they should be focusing on whether the product is a good fit for its intended market.