A virtual dataroom (VDR) allows investors to securely share sensitive documents and other information online. This tool can help startups streamline their due diligence and build confidence with investors throughout the funding process. By removing the need for email exchanges and streamlining due diligence, founders of startups are able to focus on generating leads.
Startups often struggle to determine what information to include in their data rooms for due diligence on investors. If they don’t include enough information, they run the risk of not being able to answer concerns investors might have. If they include too numerous details and they can be overwhelmed. Fortunately, the best VDR provider can help you organize and prioritize important documentation such as forecasts, financial projections and cap tables, business plans and much more for efficient due diligence.
In addition to financial documents, the founders of a startup should also submit a thorough competitor analysis. This section should prove that the company is knowledgeable on its market, and includes its immediate competitors by highlighting key distinctions such as price points and features, as well as customer satisfaction ratings. The startup should provide any market research it conducted as well as any public reports that back up its claims.
The startup should also include its articles of incorporation as well as any amended or restated versions. This can help establish the legitimacy of the startup and provide a clearer view of its ownership structure. When choosing a virtual data room for startup fundraising, choose a vendor that offers a free trial or demo to test the software and practice reenacting the presentation to Investors. Additionally, select a service with flexible pricing plans that expand as the company grows through subsequent rounds of financing and transactions.