Traditionally, companies stored important documents in a secure area that potential buyers could access during due diligence. Nowadays, these documents are digitally stored in the data room. Investors can access information like your articles of association, patents, intellectual property, and the legal structure of your company including contracts, stock vesting, and the cap table (which determines who owns how much) prior to committing to invest in your business.
If you’re in the process of preparing for an investor, an exit or acquisition, it’s essential to have the proper documentation ready in a timely fashion. This speeds the process and decreases the possibility of missing something important.
Virtual data rooms provide an environment that is secure for sharing and storing documents relating to IP and licensing. Security features such as audit logs as well as user permission settings watermarking, and limitations on downloading or printing help prevent information leakage and data breaches.
Lawyers are wikipedia reference often confronted with large volumes of confidential documents during a case. Virtual data rooms are a great option to manage this information due to their strong encryption methods and extensive security controls. VDRs also enable lawyers to share and collaborate on files with clients while keeping the confidentiality of sensitive information.
An investor data room must be set up as soon as you start selling to investors, so that they can access all of your pertinent information during due diligence. This will allow them to understand what you’re offering and help them make an the right decision about whether they would like to team with you.
