www.dataroomdesign.info/getting-involved-in-a-successful-investment/

A data room is a web-based platform that lets startups organize all the important documents that will be viewed and analyzed by potential investors. This streamlines the due diligence process, helps startups present their company in the best light, and also demonstrates professionalism.

The best virtual data rooms provide a secure storage environment as well as a way to share files with other parties. Users can establish user hierarchies as well as control access settings (e.g. NDA-approved users) to ensure that documents aren’t copied (via screen grabs or downloaded). They also allow users to track usage, monitor activity, and share physical files.

Investors will review a wide array of documents as part of due diligence. These include financial statements, forecasts and business plans. They’ll be looking for customer references and referrals and a cap table describing ownership structure, and the list of all current employees.

Startups should use the virtual data room, which provides a simple configuration that includes a dashboard on which the most recent activity is highlighted. In addition they should choose a vendor that provides a range of deployment options and a single sign-on system for all projects. Additionally, they should search for a vendor that offers comments or short messages, which makes it less necessary for investors to leave the platform if they have feedback or questions. This makes them more efficient and enhances the overall communication during the review period.