A data room can be a powerful tool for demonstrating the value of your business and its potential to investors. It is generally used for due diligence in M&A deals however it can be beneficial in fundraising, IPOs, and other investor meetings. However, creating a data room can be a time-consuming and sometimes daunting task. How do you determine which documents to include what should be arranged and grouped? How do you assign permissions to them?

As a startup, you should be focusing on sharing data to support your overall narrative. This will vary by stage, for example that startups in the early stages may need to share data on developments in the market, changes in regulation and compelling “why now” factors; whereas growth stage companies should be focused on trends in key metrics, like new revenue, customer acquisition and similar.

Be cautious about providing too many details. In fact, too much information could cause investors to become overwhelmed and could suggest that your team doesn’t know what’s important for the company. Also, make sure that the metrics you provide are representative of the full data instead of being selectively presented (like simply displaying “bright spots”).

An annotation tool allows users add their own questions and comments to any document in a data room. This keeps discussions focused and helps to manage the Q&A process. Finally, granular access permissions that can be customised on an individual level for a folder or document is essential to reduce the possibility of sensitive information being shared with a third party. Look for a service provider that provides a variety reporting tools to track the activity of users. For example what documents are being viewed when.

http://virtualdataroomsoftware.net/set-up-your-data-room-for-safe-file-sharing-and-transferring