How to Create a Data Room for Your Business

https://dataroomfashion.com/embarking-on-the-cloud-journey-virtual-data-rooms-revolutionizing-boardrooms/

Often, the process of selling a business requires sensitive documents and information be shared with several buyers. If you’re looking to sell your business or need to share sensitive information in a secure way, a virtual data room is the solution. A data room, also known as a virtual dataroom for due diligence can provide the secure distribution and control that you need to conduct your transaction.

Requests for information from investors are made during the process of deal flow, however, they are usually made in two steps. Stage 1-data needed to create a Term Sheet (e.g. market fit of the product and financial models cap table).

Stage 2 detailed due diligence information request (e.g. security-related documents, material agreements, and more).

When designing a data room take into consideration that investors are seeking an efficient and simple navigation through the data and documents. Make sure to include a comprehensive document list and a logical arrangement to assist investors in finding the documents they require. This can be accomplished through the use of folders, metadata and an standardized naming convention for documents.

Another suggestion is to avoid sharing data in a fragmented and unorthodox way in the dataroom. This could confuse investors and reveal a lack in understanding of your business. Also, be careful to include only the information that are relevant to your company and remove any docs that are no anymore relevant. This will help save time and ensure that all parties have access to the most up-to-date and accurate information.