www.dataroomen.com/top-5-reasons-why-your-company-needs-a-data-room/
A virtual dataroom (VDR) allows investors to securely share documents and data online. This tool can help startups streamline their due diligence process and increase confidence with investors throughout the funding process. By removing the necessity for email exchanges and streamlining due diligence, founders of startups are able to focus on generating leads.
Startups often have difficulty determining what information to include in their data space for due diligence by investors. If they don’t include enough, they risk not being able to answer any questions investors ask. Too many details and they’ll be overwhelmed. Fortunately, the best VDR provider will make it simple to prioritize and organize important documents such as financial projections, forecasts, cap tables, business plans and more to ensure effective due diligence.
Startup founders should include an in-depth analysis of their competitors along with key financial documents. This section should prove that the company has a clear understanding of its competition and market by highlighting key distinctions such as pricing, features, and customer satisfaction ratings. The startup should disclose any market research that it conducted, as in addition to any public reports that support its claims.
The startup should also include the articles of incorporation, including any revisions or restated versions. This can establish the legitimacy of the business and provide a more clear picture of its ownership structure. When choosing a virtual data space for startup fundraising, look for a provider that provides a trial or demo to test the software and practice the presentation to Investors. Make sure to select a vendor with a flexible pricing plan that can scale as the company grows through subsequent rounds of funding and transactions.