A data room is a digital space check these guys out used to share sensitive information during due diligence or other business transactions. Data rooms are used in a variety of industries including IT, healthcare, and finance to share sensitive information with potential investors. Prior to this due diligence was generally performed in physical rooms, but now it is mostly conducted digitally and usually involves a large number of documents.

Investors will have a lot of questions regarding the startup’s documentation. It is the founders’ job to answer these questions in a way that makes them feel welcome and speeds the process. Begin by creating an organization structure that is organized and clear with clearly defined documentation grouped into categories (e.g. legal, financial, contracts). Labeling these documents and folders makes it easier for stakeholders to locate the data they need. It is also beneficial to add metadata to the data room to give additional context to each file.

Other useful sections that founders can include in their data room include a competitive analysis, a list of current customers and referrals, as well as a customer references/testimonials section. Lastly, a company organisation/formation section includes any documents that show how the startup is legally registered and operated. This could be a list of articles that include business certificates, corporate certificates, information regarding tax and an audited Financial Statement. This can prove that the startup is a legitimate and credible entity for consideration by an investor.