The solution is a data room which is a secure place in which a startup can keep important due diligence documents and restrict who can access the documents. A data room could be a custom-built software that enables granular permissions and expiring links or it could be as simple as a shared Google Drive folder.
Investors are interested in your business and would like to know more about your team and your business model, the traction you have, and your financials. An investor data space will help streamline the process and will help you close a deal sooner. What is an investor dataroom, and what should it include?
Years ago, if a company wanted to acquire another company, it needed to have access to the historical and financial documents of the company. Those documents were typically stored in a chamber and individuals crucial to decision-making would visit the room to review them. Investors do the same type of work today to determine whether they should invest in a business, and they need access to the same documents.
The most effective investor data rooms are structured in a way that makes it simple for investors to understand and navigate the information. You will also want to ensure that the data you provide is accurate and that the information does not contradict itself. A well-organized dataroom makes the fundraising process more efficient.