Traditionally, companies kept important documents in a safe location that buyers could access for due diligence. These documents are now stored digitally in data rooms. Investors are able to access information such as your articles of association patents, intellectual property and the legal structure of your business, including contracts as well as stock vesting and a cap table (which shows who owns how much) prior to committing to invest in your business.
When you’re preparing for an exit, investor or acquisition, it’s important to have the proper documentation prepared quickly. This helps speed the process and decreases the possibility of missing an important item.
Virtual data rooms provide a safe environment data room intellectual property for sharing and storing IP and licensing documents. Security features like audit logs and user permission settings along with watermarking, printing and download restrictions stop data breaches and information leakage.
Lawyers often have to deal with large volumes of confidential information in the course of a case. Virtual data rooms are a great method to manage this information because of their strong encryption techniques and granular controls on security. VDRs allow lawyers to collaborate with clients and share files while maintaining the confidentiality.
When you start pitching investors, a ‘data’ room for investors should be set up to ensure that investors have access to all the necessary information for due diligence. This will ensure that they understand what you’re offering and make an informed decision on whether or not they want to work with you.
