When your startup is ready to raise money, the first meeting with potential investors often ends with a request for access to your “data room.” But what exactly does that mean? And what should you include in it?
A data room is a secure repository for company documents. Its main purpose is to enable authorised individuals to view sensitive information in a safe manner. It is often used in M&A diligence and other business processes where large volumes of confidential information are exchanged. The best online rooms have security protocols for removing and changing information, software search capabilities and standards that allow only authorized personnel to view the data.
The use of a data room is more efficient than the traditional method, which involves printing and distributing hard copies. Data can be accessed by anyone with an internet connection, and a computer, anywhere in the globe. By creating a virtual room, you can ensure that the information you store is protected from natural disasters and fire.
When deciding which data room provider to choose, consider how many employees will need access and what their capabilities are with technology. You should look for platforms that offer free trials to see how they work before you invest. You can also ask your peers for recommendations business deal management software and which platforms they prefer. This will help you narrow your options and make the best choice for your needs.