How Startups Can Use a Data Room to Share Documents With Investors

Most people think of data rooms as an instrument for completing due diligence in mergers and acquisitions (M&A) however, they can also prove useful in capital raising. Startups might consider using data rooms to share documents with investors, especially when they are in the final stages of fundraising. A data room that has the right features can help streamline communications and improve investor confidence.

Typically data rooms include a dashboard, which gives an overview of the latest activity and notifications. Users will be able to personalize their dashboard and adjust their security and notification settings. When they log in, users will be prompted to enter their email address, agree to the Terms of Privacy and Use and then adjust their the password protection settings.

Once users are logged in, they will be able to view and download documents. A data room must have an index that allows users to find the document they’re searching for, and, perhaps most importantly the ability to edit the file if needed. A data room should also be able to monitor engagement on specific documents.

A data room should contain a Q&A section where questions can be asked and answered. The platform can automatically categorize questions and answers, and it can even tech3shed.org/all-you-need-to-know-about-data-room/ identify specific terms or phrases that need to be redacted using its own artificial intelligence engine. The system can also mark these sections with an arrow of red and mark them accordingly as future references.