How to Set Up a Data Room for Investors

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A data room is a professional solution for document management, storage and sharing. Cloud solutions are offered by popular providers like Quoroom, iDeals and Docsend through to niche providers specifically designed to meet specific industries or business needs. A good service will offer templates, ways to organize and sort files more efficiently, multi-user access via tools for communication and permission settings as well as custom analytics and data tracking, as well as watermarking to downloaded documents and many more. The right software for your needs will help you minimize risks and time, reducing costs and also increase internal transparency.

In the course of major events, like mergers and acquisitions, tenders or capital raising, there’s usually a significant amount of data to analyze. This data may contain sensitive information that, if released could cause harm to the company that is involved. A secure data room, whether physical or virtual, allows interested parties to examine the data without divulging confidential information or placing the deal in jeopardy.

When considering the best way to set up your investor information room it is crucial to keep in mind that each business is different and will require different documentation. There are a few documents that are essential for all businesses. These include your Confidential Information Memorandum, your Cap Table (a breakdown of who owns what percentage of the company), Board resolutions, milestones and important contracts with customers. These documents will provide investors with a a complete picture of your company and will to speed up the process of fundraising.