A data room is a valuable tool for accelerating the process of financing your business. It can include private business information, such as revenue projections, IP ownership documentation, detailed financial records, and more. The ability to have all this information together will assist investors in conducting due diligence, evaluate your business and make an informed investment decision.
As founders, it’s essential to remember that your goal is to make the life of the investor as easy as it can be. After all, the more time they have to spend searching the data room to find the information they require the less likely they’ll provide you with a term sheet. This means making the data room as easy as is possible (which is done with many tools, such as DocSend’s Chrome plugin) and also making it as simple as possible.
To ensure that your data room is easy for your counterparts to navigate, make sure you structure your folders clearly using an indexing system that makes it easy for acquirers to access the data. Also, share standard analyses rather than unconventional ones; non-standard analysis can cause confusion for your partners and create confusion when trying to understand the data.
Include a comprehensive manual and training sessions in your data room to help reduce the burden on your counterparties. These training documents can help users learn how to navigate and access your data more efficiently and reduce the risk of mishandled information or misinterpretation.