A data room is an online platform that allows for sensitive information exchange during due diligence. When you are preparing for a M&A transaction or closing an investment or supporting other high-risk business activities, data rooms allow users to easily share and access documents while ensuring the security of those files.
Investors will need to review important corporate documents during the due diligence phase. This includes coding contract reviews and shareholder agreements, for example. If the documents are exchanged via shared drives or emails it can be a lengthy and time-consuming. However the use of a virtual data room lets legal teams and other stakeholders to collaborate securely on crucial documents.
As a founder, it’s important to know what investors expect from your data room, so that you can deliver quickly and efficiently. There are a few key elements to include in your data room that will help you stand out from the rest of the pack:
1. Team Information
One of the most common requests from investors is for a list of current team members and their titles. This can help speed up the process when you provide it in a concise section.
2. Competitive Analysis
Investors will also want to know the strengths and weaknesses of your competition. It will demonstrate your research and improve the process when you include a competitive analysis of the most prominent competitors.