A data room is a secure space that allows multiple parties to access and view the same documents. It is used to conduct due diligence during mergers and acquisitions, fundraising and corporate restructuring. There are numerous cloud services that provide storage for data rooms like Quoroom, iDeals, DataSend or Docsend for example, and it is important to do your research before choosing one. Be sure the service you choose offers templates, easy methods to sort and organize documents, custom analytics, as well as watermarking documents that you download.
When creating an investor dataroom the founders must think about the types of information that investors want. It is recommended to include the following sections:
Documents pertaining to company organization/formation They include articles of incorporation (bylaws), business certificates, tax information and any other documents investors might require to prove the legitimacy of a new company.
Financial Information In this section are historical and projected financials, as well the assumptions and sources used to make the projections. This section may also contain pitch decks or whitepapers.
Founders may also choose to add an “Other” section that contains anything else an investor might require, including intellectual property, technology stacks, and more documentation for the company. Investors will feel more secure when the data room is well-organized, complete and organized. This could result in quicker deals and more value.