If you’re looking to raise funds or simply making sure that your business has all the information it needs to be successful having a virtual data space is essential. Not only can it help you organize and store your files in a secure setting it also facilitates due diligence and valuation procedures.
During due diligence, investors and acquirers are looking for as much information as possible to determine whether or not a company is worth investing in. The process can be delayed or even halted in the event that the startup isn’t capable of providing the required details. This is why it’s essential to set up an investor data room prior to when you look for investments.
However, the specific contents of your investor data space can differ based on the size of your company and the degree of complexity of your business. One method is to create main folders that are associated to particular types of data such as project stages or departments. Within these folders, you could create subfolders in order to divide your files into easy-to-follow structure.
The level of privacy of each file is equally important. To ensure the security of sensitive information, think about setting the permissions in granular ways. Some providers allow you to create group rights that will grant access to specific categories of professionals or entire departments, like accountants and investment bankers. This can significantly simplify the process of granting access to most appropriate people and make the process more efficient. This is especially crucial when a startup is going through multiple rounds due diligence or is preparing an offer.