It is essential to keep well-organized and clear documents for investors, regardless of whether your business is in the beginning stages or is growing. Data room software makes this possible and offers benefits such as templates that are tailored to your needs. This makes it easy to access and share the specific information you need to provide, decreasing friction for the results you desire.
Virtual data rooms are generally used for due diligence purposes during legal or financial transactions between two or more parties. However, the advancement of technology and the trend towards remote working means that they are increasingly being utilized to aid in the full deal lifecycles and even business restructuring and fundraising. They streamline processes, provide security and allow collaboration and efficient communication – all of which is essential to the M&A industry.
It’s important to know what information should be included in your virtual data room, and the best way to keep it. This will depend on the story you intend to tell. It is important to think about the details that will give investors the most complete picture.
For instance, for a seed-stage business it could be appropriate to include the Confidential Information Memorandum (CIM) along with details of the Board structure and organisational chart, the most important agreements and relationships, milestones and metrics – everything that is relevant to the narrative you’re trying tell. This will allow you to respond quickly to any questions that the investor might have and demonstrate the clarity of your information.