Historically the virtual data room (VDR) was an actual location that offered access to confidential documents during high-risk business transactions, such as M&As or IPOs. Now virtual data rooms (VDR) provide the most convenient and cost-effective solution for managing sensitive information. Whatever the size of your company you will benefit from the security and comfort a VDR provides during critical business transactions.
During the due diligence process, potential investors might want to examine a range of documents related to your business. This could include financial records, as well as legal documents, contracts and intellectual property. You’ll also need to share the names of your customers and a competitive analysis. Include a section that highlights the expertise and experience of your team.
When you upload your files to the dataroom, make sure that they are organized and easy to navigate. Create a clear structure for your folders with main categories and subfolders that are standardized with document names and descriptions. It’s also helpful to group together documents on the same subject to make it easier for review. You can further organize your files by creating a master index for guidance.
Be careful not to include too much information in the data room because it could be overwhelming and distracting to potential investors. Only share data that is important for the company. Also, don’t provide unconventional analyses which are confusing to the investor (i.e. sharing only a part of the Profit & Loss Statement instead of the whole picture). Make sure that the platform offers the ability for investors to contact an email or leave an online comment.