Using an Investor Data Room to Streamline Due Diligence

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An investor dataroom simplifies due diligence as well as collaborative decision-making and collaboration throughout the transaction. It assists investors in understanding the importance of a startup, and provides effective communication tools to facilitate smooth interaction with a variety of stakeholders. Due diligence software for investors is used by people who are responsible for evaluating and making investment decisions, professionals who help clients navigate complex investments and also individuals involved in M&A transactions.

In your pitch, you’ve made assertions about your startup’s intellectual properties (IP). In the investor data room, show VCs and angels your patent numbers as well as patent filings, trademarks, and other IP assets to ensure due diligence is carried out efficiently.

The purpose of your investor data room is to expedite the due diligence process and ultimately, to conclude an agreement for funding. To achieve this, you’ll need create an investment data room that’s well-organized and offers a simple navigation.

It’s an excellent idea to have a detailed audit trail to track the amount of data shared, by whom, and when. With expiring links, watermarking, fence view and granular permissions your team can manage the user’s activity easily.

As you go through discussions with VCs and angels you’ll likely receive requests for more information at various stages in the deal flow. In the initial stage, a VC or investor will be looking for data to support your pitch deck, such as market fit and financial models. In stage 2, they’ll ask for more specific information about your business model, traction, and staffing.