Read Full Report about confidential performances with data room due diligence
Due diligence by investors is a vital aspect of capital raising and having the right information space for startups can reduce the time it takes to raise capital process. Investors can quickly evaluate a company and make informed decisions when all the data is arranged in an electronic repository.
All this information in one location allows startups to demonstrate their value proposition. It makes them document aspects of their business that were previously in the founder’s head like strategies to acquire customers and development plans. The process of preparation for an investor or acquirer’s due-diligence can help a startup understand their own company through the eyes of others, which can be valuable to any future management team.
The best virtual datarooms designed for startups provide a controlled, however, easy access to a wealth of current and relevant information. They also provide advanced features that can streamline the fundraising process, such as customizable NDA templates and central storage for files. Startups can even connect their virtual data rooms to existing tools that they use for business operations, like cloud storage, file-sharing services and mobile applications, to ensure a seamless experience for investors.
The most common documents that go into the data room of a startup include investor presentations (also known as a pitch deck) along with strategy documents and key performance indicators (KPIs). In addition to the above startup companies should consider adding market research reports, any current surveys or testimonials, as well as details on customer retention and satisfaction. Startups should keep their data room up-to-date as their business evolves, to give complete information about the company’s performance to potential investors. Moreover, a good virtual data room allows administrators to track user activities and data, such as what documents are the most commonly seen or for how long each document is viewed for in order to in the follow-up discussions.
