How to Create a Great Data Room Experience for Your Investors

Data rooms are an important element of due-diligence during mergers and acquisitions. However, they can also be used for other transactions, such as fundraising, IPOs, legal proceedings and many more. They are a safe way to share information with a restricted number of individuals who have permission.

The purpose of the virtual data room is to simplify the process of due diligence by allowing companies to share more data, and reduce the chance of miscommunication. The best VDRs have smart full-text search and a flexible folder structure and indexing features that allow users to easily navigate through the data. They also feature dynamic watermarking, which can prevent unintentional duplication and sharing, and let users define permissions for individual files and segments of the VDR.

To ensure that investors have a positive experience with your company, you must organize and present your data effectively. Make sure that you have a well-organized folder structure and clearly label each of the documents you keep in each section. This will save them time and keep them engaged with your pitch. Avoid sharing a fragmented and unorthodox analysis. (For example, presenting only a portion Profit & loss statement, instead of the complete view) This can cause confusion for investors and address hamper their ability to make an agreement.

The most efficient financing processes are based on momentum. If you have all the relevant information an investor requests before the first meeting, they are much more likely to move quickly. Set up your data room according to the above framework so that you can respond to 90% of questions right away.