Traditionally, companies stored important documents in a secure room that potential buyers could access during due diligence. Nowadays, these documents are digitally stored in a data room. Investors are able to access information like your articles of association and your patents, as well as your intellectual property and the legal structure for your company. This includes stock vesting, contracts and a cap-table (which indicates who owns what).
If you’re in the process of preparing for continue reading this an investor, exit or acquisition, it’s important to have the appropriate documentation completed in a timely manner. This can speed up the process and reduces the risk of missing an important element.
Virtual data rooms offer secure environments for sharing and keeping IP and licensing documents. Security features like audit logs as well as user permission settings watermarking, and limitations on downloading or printing can prevent leaks of information and data breaches.
Lawyers often have to deal with large volumes of confidential documents during a trial. Virtual data rooms are a great method of handling this material due to their secure encryption methods and their precise controls on security. VDRs also allow lawyers to share and collaborate on files with clients while protecting the confidentiality of sensitive information.
An investor data room should be loaded at the time you begin pitching to investors so that they can see all the relevant information during due diligence. This will ensure that they know what you’re selling and make an informed decision as to whether or not they want to work with you.