Using a Data Room for Investment Deals

A investor or VC has shown interest in your venture, and you want to begin the process of investing. This is the time when a virtual data space is required to share more detailed documentation about your business model, company strategy, traction and financials. This massive collection of documents should be organized, tracked and easily accessible. This service can be provided by an equity platform that is private. It is important to choose a platform that offers security, tracking, and granular permission control to ensure that only the correct information reaches the correct stakeholders.

Investors will likely also need to see your articles of incorporation along with shareholder agreements and the consolidated balance sheet. Having this information available in a data room that is virtual can streamline the due diligence process, which could result in a faster decision and a better term sheet presentation. If your investors are in the same industry, or are part of the same network, then having this information to them will help them build trust with your company’s team and employees.

You should only include current and relevant documents in your investor data room. Include irrelevant or outdated information that slows down the review of the investor and create confusion. It is a good idea include short messaging or commenting features built into the virtual data room, to ensure that the investor doesn’t have to leave the website in order to ask a question, or to make notes about something.

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