A data room is an effective instrument for demonstrating the worth of your company and its potential to investors. It is generally used for due diligence in M&A deals but it could also be beneficial in fundraising, IPOs, and other investor gatherings. However, preparing a data room can be a time-consuming and sometimes daunting task. What do you decide on which documents you should include What should they be organized and grouped? And how can you set permissions for them?
As an early stage startup, you must concentrate on sharing information that supports your overall narrative. This will vary by stage, for instance, seed-stage startups may want to share data about market trends, regulatory shifts and compelling “why now” factors; whereas growth stage companies should focus on trends in key metrics, new customer acquisition, revenue, and other similar data.
It is essential to avoid giving too much information. Too much information can overwhelm investors, and it may indicate that your team doesn’t know how to make a difference for the company. Make sure any metrics you present are representative of all data, and not just a handful (such as displaying only “bright spots”)
An annotation tool lets users add their own questions and comments to any document in a data room. This helps keep discussions focused and makes it easier to manage the Q&A process. To minimise the risk that sensitive information is shared with third party it is crucial to have specific permissions on documents and folders. Also, look for a service that provides a variety of tools for reporting detailing user activity and information about what documents are being viewed and the times they are viewed.
http://virtualdataroomsoftware.net/ma-and-value-driver-analysis/