Historically, a virtual data room (VDR) was physically located and provided access to confidential documents during high-risk business transactions, such as M&As or IPOs. Virtual data rooms (VDRs) are a cost-effective and convenient method to manage sensitive data. You can take advantage of the security and convenience that the VDR offers during significant business transactions, regardless of the size of your company.
During the due diligence process, prospective investors may want to examine various documents related to your company. This could include financial records as well as legal documents, contracts, and intellectual property. You’ll be required to include a list for clients and an analysis of the competition. It is also important to include a section that outlines the expertise and experience of your team.
When you upload files to the dataroom, ensure that they are well-organized and easy to navigate. Create a clear folder structure with subfolders and main categories as well as standard document names and descriptions. To simplify the process of reviewing, it’s helpful to group documents that are closely related. You can further organize your files by creating a master index to provide guidance.
Avoid including too much data in the data room since this could be overwhelming and distracting to potential investors. Don’t share data that isn’t crucial to the company. Similarly, do not provide unorthodox analyses that could can confuse investors (i.e. sharing only the portion of a Profit & Loss Statement rather than the entire picture). Also, make sure you provide short messages or comments built into the platform to ensure that investors don’t have to leave the data space to communicate with you.
https://gooddataroom.com/how-vdrs-can-keep-deals-alive/