A data room is a secure system to share confidential business documents to multiple parties involved in a transaction. It is used in fundraising, M&As IPOs and legal proceedings. It helps to reduce the risk by making information accessible in a controlled environment and also by reducing time-consuming travel.

Getting Started

The first step to creating an information room is deciding on the information you would like to include. While every startup will have its own requirements, investors generally want to see similar details. Make sure you organize and upload all the required documents and then build a folder structure that is appropriate for your business. Label the folders and documents clearly for simple navigation. A grouping of similar documents can help investors to find the information they need.

Include a brief paragraph on the team, the product and the vision of the company. This will help to build confidence in your business and make it more likable to potential investors. Avoid sharing information great site that is too detailed or unconventional analyses that may make investors confused. This could be distracting and might signal that you aren’t fully prepared for the due diligence process.

The most successful fundraises operate off of momentum. It is therefore essential to have all the information prepared before meeting with investors. If you follow the above framework, you will be able to answer 90% of the questions that investors might have and continue to move the process forward. Be careful not to divulge information because this could cause delays in the funding process.