A data room is a digital repository that is used to store and securely shares sensitive business data. Most often, it is used for due diligence, M&A or capital raising, it helps prevent sensitive documents from falling into the hands of unwelcome third parties. It also makes the process of closing deals more efficient by allowing different parties to look over and comment on documents simultaneously. While there are a number of free file sharing tools however, they are not set up to handle the security requirements that come with storing and managing confidential business information. They aren’t equipped with the same level of permission settings, auditing capabilities, or watermarking that a specially designed VDR provides.
Depending on the stage of your business, the items you include in your data room could vary. However there are some fundamental items that investors will expect to be able to see. These include:
1. History of the company and growth. This could be a brief section that highlights the history of your company, a 1-pager outlining your product and marketing goals and key growth metrics, or a more in-depth section highlighting your business’s expansion trends, history and market research, including engagement and retention metrics for customers.
2. Charts of the team and organization. This includes the number of team members, their role and pay as well as titles and titles. It is crucial to communicate this with your investors so they are aware of the strengths of the team and how your company plans to scale.
Make sure to use a data room solution such as Firmex that was designed with the purpose of keeping your information safe and secure. By doing this, you can help make the process of financing and M&A much easier and more secure.
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