A data room is an online platform that is secure and allows the exchange of sensitive data during a due diligence process. When you are preparing for an M&A transaction or closing an investment or facilitating other high stakes business activities data rooms permit users to share and access files while ensuring the security of the files.
In the due diligence phase of any business transaction investors should review a variety of important corporate documents such as contract reviews and shareholder agreements, among more. This exchange of information may be difficult and time consuming when it’s done through an email chain or through shared drives. A virtual data room allows lawyers and other parties to work together securely on important documents.
As a founder, it’s essential to understand what investors are looking for from your data room to be able to provide them with speed and efficiency. There are many important aspects to include in your data room that will make you stand out the rest of the pack:
1. Team Information
One of the most common requests from investors is for the current list of team members and their job titles. This will help speed up the process if you can provide it in a concise section.
2. Competitive Analysis
Investors are also likely to be interested in knowing the strengths and weaknesses of your competition. It will demonstrate your official source research and accelerate the process when you include a competitive analysis of the most successful competitors.