Historically it was the case that a virtual room (VDR) was physically located and provided access to confidential documents during high-risk business transactions, such as M&As or IPOs. Now, virtual data rooms (VDR) provide an efficient and cost-effective way to manage sensitive data. You can benefit from the convenience and security that a VDR can provide during major business transactions, no matter the size of your organization.
During the due diligence process, prospective investors will need to look over many different documents that pertain to your business. These could include financial records and legal documents, contracts, and intellectual property. You’ll be required to include a list of clients and an analysis of the competition. Include a section that outlines the expertise and experience of your team.
When you upload your files to the data room, ensure they’re well-organized and easy to navigate. Create a clear structure for your folders with subfolders and main categories, along with standardized document names and descriptions. To speed up the review process it is helpful to categorize documents that have a common theme. You can further organize your files by creating a master guide.
Do not include too much information because it could overwhelm and irritate potential investors. Make sure to share only data that is a needle-moving for the company. Also, don’t present unorthodox analyses that confuse the investor (i.e. sharing only the portion of the Profit & Loss statement versus the full picture). Make sure the platform provides a way for investors to send an email or leave comments.