A data room is an area that can be used to store confidential business files and documents. They are commonly used in mergers and acquisitions (M&A) as well as due diligence fundraising, IPOs, legal proceedings as well as general storage and sharing of files. Data rooms are typically based on software-as-a-service (SaaS) and offer bespoke features such as document tracking, watermarking and more to protect sensitive information. In the past the data rooms were physical spaces that held hard copies of documents. Today, the majority of data rooms are online, hosted, and based on software-as-a-service (SaaS).
Investor data rooms permit you to augment the story and vision behind your company by providing evidence of your accomplishments to date. A well-organized investor data room shows potential investors that you’re prepared for the process and they are likely to see your business in a more positive light as a result.
A data room for investors is not only a great tool to showcase your company but also allows you to respond to questions faster and more efficiently. You can use the search function to locate files, so you don’t have the need to search through all of them.
You can also decide what information you want to hide and which you’d prefer to make public. You can customize the information for each person. For example when you’re in the middle of an M&A process, you can share your strategy and goals with investors, but keep your intellectual property and tech stacks private to the buyer. This can speed up the process and close the deal faster.