A data room is a digital space to share sensitive information during due diligence or other business transactions. Data rooms are utilized in a variety of industries including finance, healthcare and IT to share sensitive data with potential investors. In the past due diligence was usually done in physical rooms but nowadays, it is done digitally and usually involves large numbers of documents.

Investors have many questions when they review the documentation of a startup, and it is the job of founders to address those questions in a way that www.gooddataroom.com/benefits-of-virtual-deal-rooms/ is attractive to investors and speeds up the process. The best place to begin is to create a clear and organized folder structure, with clearly defined documents organized into categories (e.g. legal, financial, contracts). The clearly labeled documents and folders allows users to find the information they need. It can also be helpful 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 include articles of incorporation, business certificates, tax information and an audited financial statement. This helps to show that the startup is a legitimate and trustworthy entity for consideration by investors.