What Investors Want From a Data Room
A data room is an online platform that is secure and allows the exchange of sensitive information during due diligence. Data rooms are great for any high-risk business activity such as preparing for an M&A deal, closing an investment or aiding in another high-risk transaction. Users can access and share documents while maintaining the security of the files.
In the due diligence phase of any business transaction investors should review various important corporate documents like contract review, shareholder agreements, and more. If the information is exchanged via shared drives or emails it can be a long and complicated. A virtual data room permits the legal departments and other stakeholders to work in a secure manner on crucial documents.
As a founder, it’s important to understand what investors want from your data room, so you can present it quickly and efficiently. There are a few key elements to include in your data room that will help you stand out from the crowd:
1. Team Information
One of the most common requests from investors is for a list of current team members and their titles. If you can present this in a brief section it will speed up the process much faster.
2. Competitive Analysis
Investors are likely to want to know about your competition’s strengths and weaknesses. If you could include a consolidated competitive analysis of your top competitors in the data room, it will prove the depth of your research and to speed up the process.