A virtual data room (VDR) is an encrypted repository that is which is used to share confidential documents with stakeholders during the due diligence process. It is typically used during M&A transactions, but it can also be useful in other business events such as fundraising, IPOs and legal proceedings.
Investors would like to have many different aspects prior to investing in your startup, including your team, your product vision, market opportunity and competitive landscape, as well as traction. But compiling and presenting this information could take up time which could be better used creating your business.
You can simplify due diligence and make your startup more attractive to investors by using a dataroom. How do you pick one of the many data rooms available?
To begin, identify what you need your data space for. Determine what documents you need to upload, then categorize them to make it easy to find them. You will also need to set permissions for each document. It is recommended to test the data room before you start it to ensure that everything is functioning properly.
Select a VDR service provider. There are a myriad of options that range from the most popular software to more specialized software. Look for a pricing structure that matches your needs, for instance, per-storage or per page. Some also offer a free trial that is a great method to determine what software is best for you. Also, make sure to review reviews and look for safety features.