How Do You Build a Data Room for a Funding Round?
If you’re looking to speed up your startup’s funding process data rooms be a great tool. It can contain confidential information about your business like revenue projections and IP ownership documentation. It may also contain comprehensive financial records. Being able to access all of the information in one place will assist investors in conducting due diligence, assess your business and make an informed investment decision.
As founders, you must always keep in mind your goal to make the investor’s life as simple as is possible. The longer investors spend looking for the information they require more likely they will offer you an Term Sheet. This means making the data room user-friendly (which you can do with various tools, such as DocSend’s Chrome plug-in) and keeping it simple.
To make it easy for your acquirers and counterparts alike to navigate your data room, structure your folders with an indexing system that makes it easy for them to find the information. Share conventional analyses instead of unusual ones. Non-standard analyses can confuse your colleagues and create confusion when trying to comprehend data.
Another way to ease the burden on your counterparties is to add a complete user guide and training sessions for your data room. These training materials can help users understand how to navigate and access your data more efficiently to reduce the risk of mishandled information or misinterpretation.