A investor or VC has expressed an interest in your business, and you’re looking to proceed with the process of investing. A virtual data room is required at this point to share more detailed documentation about your business model, corporate strategies as well as financials, traction, and other information. The large amount of information requires to be categorized, tracked and easily accessible. A private equity platform could provide this functionality, but it is essential to search for a platform that offers security, tracking, and granular access controls to ensure that the correct data is placed in the hands of the correct users.
Investors are likely to also need to review your articles of incorporation along with shareholder agreements and an consolidated balance sheet. The availability of this information in a virtual space can streamline the due diligence, leading to a faster decision and term sheet presentation. In addition, if your investors are in the same industry or network and have this information available, having it at their fingertips will help them build trust in your team and your business.
Make sure to include only documents that are current and relevant in your investor data rooms. Inclusion of outdated or irrelevant information can slow down the review process for investors, creating confusion and frustration. It’s a good idea include the ability to communicate in a short manner or even comment feature within the virtual data room, so investors don’t need to leave the platform to ask for clarification or even decide whether to decision to not.
