Using a Data Room for Investment Deals

Using a Data Room for Investment Deals

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A VC or investor has expressed interest in your business, and you’re ready to proceed with the process of investing. This is when a virtual data space is required to present more comprehensive documents on your business model, company strategy the traction of your business and financials. This large dataset of documents must be tracked, organized and easily accessible. This capability can be offered by an equity platform for private investors. It is essential to choose a service that provides security, tracking and granular control of permissions to ensure that the appropriate information is available to the appropriate stakeholders.

Investors will also likely need to review your documents of incorporation along with shareholder agreements and an unconsolidated balance sheet. Making this information accessible in a data room that is virtual will speed up the due diligence process, which will help speed up the decision and presentation of the term sheet. Additionally, if your investors are from the same industry or network having this information at their fingertips will help build trust in your team and your company.

You should only include relevant and up-to-date documents in your investor data room. Don’t include outdated or irrelevant information that slows down the review of the investor and create confusion. It is a good idea to have short messaging or commenting features integrated into the virtual data room, so that investors do not have to leave the platform in order to ask a question or to make an entry about something.

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