A data room is a secure platform that allows multiple parties to view and access the identical documents. It is usually used to perform due diligence in mergers and acquisitions, fundraising and corporate restructuring. It is important to research the cloud services that provide storage for data rooms, such as Quoroom or iDeals. Choose a provider that provides templates, methods to organize your files and make sorting them with ease, customized analytics, and the ability to watermark downloaded documents as well as providing a secure cyberspace.
When it comes time to create an investor data room, founders should think about the types of information investors are searching for. It is generally suggested to include the following sections:
Documents that pertain to the formation or organization of a company: These include articles of incorporation (bylaws), business certificates, tax information and any other documents an investor might require to prove the legitimacy of a new company.
Financial Information It includes historical and projected financials, as well as the assumptions as well as read the sources and reasoning that were used to create the projections. This section may also include a whitepaper or pitch deck.
Founders may add an “Other” section, which includes any other information investors may need, including intellectual property stacks, technology stacks, and other documentation regarding the company. Investors will feel more secure if the data room is well-organized and comprehensive. This can result in quicker deals and better valuations.