A data room is an online platform that is secure and allows the transfer of sensitive information in due diligence. When you are preparing for an M&A transaction, closing an investment, or participating in other high-risk business operations, data rooms allow users to share and access files while ensuring the security of those files.
Investors will want to review important corporate documents during the due diligence phase. This includes contract reviews and shareholder agreements, for example. This exchange of information can be difficult and time consuming when it’s done through an email chain or through shared drives. However the virtual data room allows legal teams as well as other stakeholders to securely collaborate on crucial documents.
As a founder, it is essential to know what investors expect from your data room, in order to provide them with speed and efficiency. There are several important things to include in your data room that will make you stand out from the rest of the pack:
1. Team Information
A common request from investors is for the current list of team members and their job titles. If you can present this in a short section this will make the process much easier.
2. Competitive Analysis
Investors are also likely to be interested in knowing about your competitor’s strengths and weaknesses. If you can provide a consolidated competitive analysis of your top competitors in the information room, it can demonstrate the depth of your research and help accelerate the process.