A data room is an online platform that allows companies to conduct due diligence, share documents, and organize Q&A sessions in a secure, controlled environment. It is used by many industries and is an essential tool in M&A, fundraising, IPOs and joint ventures. Data rooms are commonly used to store and share large, confidential files with multiple parties.
The information you share in a dataroom can vary depending on the purpose of your data room, whether it’s to raise funds, expand your market share, or share information with customers. It will also depend on the overall story that you’re trying to tell. There are best practices that you can follow to create a captivating data room presentation.
Avoid divulging confidential information those who shouldn’t have access to it. This is among a founder’s “worst fears” and is a possibility when they’re not cautious. For instance, if you are trying to raise a Series A round, you shouldn’t provide your entire investor information room to investors who won’t be interested in investing. This trickles the process and can derail the progress.
Ensure that your platform is easy to access, and consider using a data room provider that supports PCI DSS. This industry standard mandates strong security, including secure data storage and access control encryption of communications, as well as regular security tests. It is also critical to be able to track who is viewing what. The most efficient and simple method of doing this is to use document versioning.