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How to Set Up a Data Room for Investors

A data room is a professional solution for document management, storage and sharing. Cloud solutions are available from popular providers like Quoroom, iDeals and Docsend to niche solutions specifically designed to meet specific industries or business requirements. A good service will offer templates, methods to organize and sort files more efficiently, multi-user access via communication tools and permissions and bespoke analytics including data tracking, watermarking of downloaded documents, and many more. Making the right choice of software for your needs will help you reduce risk and time, reducing costs and also increase internal transparency.

In the course of major events, like mergers and acquisitions, tenders or capital raising, there’s often an abundance of information to review. These documents could contain sensitive information that, when exposed, could cause harm to the company. A secure data room, virtual or physical, permits interested parties to examine the data without exposing sensitive information or putting the deal in danger.

It is essential to remember that every business is unique and, therefore, will require different documentation. However, there are a few standard documents that will be crucial for most companies. Included in this list are your Confidential Information Memorandum (a breakdown of who is the owner of what percentage of your business) as well as your cap table milestones, important customer contracts. These documents will provide investors a complete picture of the company and help speed the process of raising funds.

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