A virtual dataroom (VDR) allows investors to securely share sensitive documents and information online. This tool assists startups in streamlining due diligence and build confidence with investors during the fundraising process. By streamlining due diligence and removing the need for recurrent email exchanges, startup founders can concentrate their efforts in generating leads.
Startups often struggle to decide what information to include in their data rooms in order to satisfy investor due diligence. In case they are not careful, they may not be able to answer any questions investors ask. Too many and they could be overwhelmed. Luckily, the right VDR provider will make it easy to prioritize and organize important documents such as financial projections, forecasts business plans, cap tables and more to ensure effective due diligence.
In addition to financial documents, startup founders should also include a detailed competitor analysis. This section should prove that the startup is well-versed in its industry, including its immediate competitors by highlighting key distinctions such as price points or features, as well a customer’s satisfaction ratings. The startup must share any market research it conducted, as in addition to any public reports that back up its claims.
The startup should also include the articles of incorporation, which should include any updated or revised versions. This will help establish the startup’s legitimacy, as well as reveal more clearly its ownership structure. Find a company that offers a free demo or trial to try the software and to practice presenting to investors. Also, choose a provider with a flexible pricing plan that can scale as the company grows through subsequent rounds of funding and transactions.