A data room is an electronic space that allows sensitive information to be shared during due diligence and other business transactions. Data rooms are used across a range of industries including healthcare, finance and IT to share sensitive data with potential investors. Due diligence was traditionally carried out in physical rooms but is now mostly conducted digitally. It involves a lot of documents.
Investors will have a lot of questions regarding the startup’s documentation. It is the responsibility of the founders to answer these questions in a manner that is impressive and speeds the process. A good place to start is to create a clear and organized folder structure with clearly defined documents that are grouped into categories (e.g. legal, financial, contracts). Labeling these folders and documents makes it easier for stakeholders to locate the data they require. It is also helpful to add metadata to the data room in order to provide additional context to each file.
Other useful sections that founders can include in https://gooddataroom.com/benefits-of-virtual-deal-rooms/ their data room include a competitive analysis, a list of current customers and referrals, as well as a customer references/testimonials section. Lastly, a company organisation/formation section includes any documents that show how the startup is legally registered and operated. This could include articles of incorporation, business certificates, tax information, and an audited financial statement. This will prove that the startup is a legitimate and legitimate business.