Once a company has convinced investors that it is ready for due diligence the next step is to share their “dataroom”. This is a virtual storage area that houses all the files that investors want to review. It also helps the company organize them in a way that investors can easily locate and comprehend.
Traditionally this process was carried out in a physical space, but now it is most commonly carried out online via what is known as virtual data rooms. The concept behind them is that they provide a secure environment where companies can keep confidential information and control who can access what.
This means that businesses can save money by paying for the software they require and not having to pay a security team who monitors a physical room. There are a variety of providers of virtual data rooms that differ in terms of features and cost so it is important to research and choose one that is appropriate for the business.
Some provide a basic option to manage documents, while others, such as iDeals or Citrix provide more advanced features such as multilingual search analytics, data tracking and OCR and smart AI categories. Once a startup has decided on a provider, it should choose which documents to include and what sort of folder structure will work best for their requirements. It is important to put together financial information as well as legal documents and contracts, as well as other relevant information to make it easier for potential buyers.