A investor or VC has shown interest in your startup and you’re ready to begin the investment process. This is when the virtual data room is required to provide more comprehensive documentation on your business model, company strategy along with financials and traction. This massive collection of documents requires to be organized and tracked, as well as easily accessible. A private equity platform could provide this capability, and it is important to look for a provider that provides security, tracking, and granular access controls to ensure that the correct information is in the hands of the appropriate individuals.
Investors will likely also require access to your documents of incorporation along with shareholder agreements and a consolidated balance sheet. This information, if available in a virtual environment will help streamline due diligence, leading to an easier decision and a quicker term sheet presentation. If your investors are from the same industry or are part of a comparable network, having this information to them will help them build trust with your company’s team and employees.
You should only include relevant and up-to-date documents in your investor data room. Inclusion of outdated or irrelevant information could delay the investor’s review, potentially leading to frustration and confusion. It is a good idea to have short messaging or commenting features integrated into the virtual data room, so that the investor does not have to leave the website in order to ask a question or to make notes about something.