Historically, a data room was an actual space that provided access to private documents in important business transactions, such as M&A or IPOs. Nowadays virtual data rooms (VDR) offer the most convenient and cost-effective way to manage sensitive data. You can enjoy the convenience and security that VDRs provide VDR can provide during major business transactions, regardless of the size of your organization.

During the due diligence process, prospective investors will need to look over many different documents related to your company. This could include financial records, as well as legal documents, contracts, and intellectual property. You’ll also need to share an inventory of customers as well as an analysis of the competition. Include a section that highlights the knowledge and experience of your team.

When you upload your files to the dataroom, make sure that they are organized and easy to navigate. Create an organization structure for your folders that includes principal categories, subfolders, and the standard names and descriptions of documents. To make it easier to review, it’s helpful to group documents that are closely related. You can further organize your files by creating what is a virtual data room an overview.

Do not include too many data in the data room since this could be overwhelming and distracting to potential investors. Share only data that is important to the business. Also, don’t present unorthodox analyses that may confuse investors (i.e. sharing just a portion of the Profit & Loss statement versus the whole picture). Ensure that the platform has the ability for investors to contact you a short message or leave a comment.