The answer is a Data Room, a secure location where a startup can store important documents for due diligence and determine who is able to access them. A data room could be a specially-designed piece of software with access to granular permissions and linking expiring, or the simple Google Drive folder.
Investors are interested in your company, and they want to know more about the team as well as your business model, your growth, and your financials. An investor data room can make the process more efficient and assist you in close deals faster. What is an investor dataroom, and what should it include?
For years, if an enterprise wanted to purchase another business, the acquiring company would require access to financial and historical documents for the company. These documents were typically kept in a room, and those who had a role in making decisions would visit the room to examine them. Nowadays, investors do a lot of the same job to determine whether they should invest in a venture, and they must have access to the same kinds of documents.
The most effective investor data rooms are arranged in a way that makes it easy for investors to understand and navigate the information. It is also important to make sure that the data you provide is accurate and doesn’t contradict the information. A well-organized data space ready to go when you have your first fundraising discussion will also allow the process to run more efficiently.