A data room is a virtual repository that holds and securely shares sensitive business data. It is typically used in due diligence, M&A or capital raising, it helps prevent sensitive documents from getting into the hands of unwanted third parties. It makes the process of closing deals more efficient as it allows multiple parties to look over information and comment on it simultaneously. While there are plenty of free tools for sharing files, these tools are not equipped to handle the security demands that come with storing and managing confidential business information. They do not have the same levels of permissions, auditing capabilities, and watermarking that is available in a VDR.
What you put in your dataroom could vary depending on the stage of business. There are a few key things that investors are likely to look for. These include:
1. History of the company and growth. This could be a brief section that highlights the history of your company, a 1-pager outlining your product and marketing goals and key growth metrics, or a more detailed section that highlights your business’s growth trends, past and market research, including customer retention and engagement metrics.
2. Organizational charts and team charts. This includes the current numbers and roles of your team members, as well as their salaries and titles. This information is important to provide investors with this information to help them understand the strengths of your team and how you plan to expand your business.
Most importantly, remember to keep your information safe and secure by using a specifically designed data room solution such as Firmex. Doing so will aid in the process of funding and M&A much simpler, safer and more efficient.
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