A data room is a secure platform to share confidential business documents with multiple parties involved in a transaction. It is typically used during M&A, fundraising, IPOs and legal proceedings. It helps reduce the risk by making information easily accessible in a controlled environment and also by reducing the time-consuming travel.

Getting Started

The first step to create a dataroom is to determine what details you’d like to include. While every startup will have its own requirements, investors will require similar details. Organise and upload the required documents and then create a folder structure that makes sense for your specific transaction. Make sure to label the folders and documents for easy navigation. A grouping of similar documents can also make it easier for investors to locate the information they need.

Include a section on the team, product and vision of the business. Providing this information will help increase trust in your company and make it more relatable to potential investors. Beware of sharing data in granular form or unorthodox analyses that could confuse investors. This can be distracting, and may signal that you’re not ready to conduct due diligence.

The majority of successful fundraising campaigns are driven by momentum. It is therefore important to have all of the information prepared before meeting with investors. You will be able answer the majority of questions your investors might ask by following the above guidelines. This will help keep the process moving. Avoid divulging information as this could lead to a delay in the funding process.

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