A virtual data room (VDR) is an online, secure repository for sharing sensitive information and documents with investors. This tool assists startups in streamlining their due diligence and create confidence with investors during the financing process. By removing the need for email exchanges and streamlining due diligence, founders of startups are able to focus on generating leads.

Startups often struggle to determine what information should be included in their data space for due diligence by investors. If they include too little information, they run the risk of not being able respond to any questions that investors may have. Include too many details and they will be overwhelmed. The right VDR provider will allow you to prioritize, organize, and archive important documents such as financial forecasts and projections, business plan, cap tables, etc. for efficient due diligence.

Startup founders must include an extensive analysis of their rivals, as well as their key financial documents. This section should demonstrate that the startup is well-versed in its industry, including its immediate competitors by highlighting key variations in price, features and customer satisfaction ratings. The startup should also disclose any market research that it check here has conducted and any public reports that back the assertions of the company.

The startup should also include the articles of incorporation, as well as any revised or restated versions. This can establish credibility of the startup and provide a more clear picture of its ownership structure. When choosing a data room for startup fundraising ensure that the provider offers a free trial or demo so that you can test the software and practice reenacting the presentation to Investors. Select a vendor that offers flexible pricing plans to scale with the company’s growth through subsequent rounds of financing and transactions.