Data rooms are used to conduct due diligence in M&A transactions, fundraising, or any other transactions that require the sharing startups utilizing digital platforms for market entry of sensitive data. They provide a more secure alternative to email and free file-sharing services. They offer granular permissions as well as security features such encryption, two-factor authenticaiton and watermarks.
The amount of data required during a due diligence process will vary based on the complexity and size of the transaction, however it is crucial that all parties have access to the same documents. A central data room with a clear folder structure along with standard document titles and an index master allows those involved in the process and other parties to navigate and locate information. The grouping of similar documents in subfolders can help speed up the review process.
When presenting data, it is important to highlight the most needle-moving KPIs, and not overflow slides with irrelevant information. It is also important to avoid sharing non-standard analysis that can cause confusion for investors and alter their impressions of the company’s growth and health.
Include a summary slide on each deck to highlight the most important elements and conclusions you would like your audience to learn from the presentation. It will make it easier for an investor to oscillate between an in-depth look at the numbers and the bigger overall picture.