Historically it was the case that a virtual room (VDR) was physically located and provided access to confidential documents during high-risk business transactions like M&As or IPOs. Today, virtual data rooms (VDR) offer an efficient and cost-effective solution for managing sensitive information. No matter the size of your business you will benefit from the security and convenience a VDR offers during important business deals.
During the due diligence process potential investors might wish to read a number of documents pertaining to your company. This may include financial records and legal documents, contracts, and intellectual property. You’ll be required to include a list of your clients and an analysis of the competition. Additionally, you’ll need to make sure to include a section that demonstrates your team’s expertise and experience.
When you upload your documents to the data room, make sure they’re well-organized and easy to navigate. Create a clear structure for your folders with subfolders and main categories and standard document names and descriptions. It’s also helpful to group documents with the same subject in order to speed up the review process. You can further organize files by creating a master guide.
Don’t include too much data because it could be overwhelming and distract potential investors. Don’t share data that isn’t crucial to the company. Additionally, don’t share unconventional analyses which make the investor confused (i.e. sharing only a part of the Profit & Loss Statement rather than the entire picture). Make sure that the platform offers a way for investors to send you a short message or leave comments.
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