Avoiding Data Room Setup Pitfalls

A safe, user-friendly virtual data room is a must for any startup hoping to accelerate their fundraising process. But establishing successful VDR is not without its difficulties. The most frequent mistakes can be avoided by making sure the following best practices are in place

Too too much information

It’s tempting to include all relevant data in a data space stage 1, but this could cause confusion for investors and diminish the value of crucial information. Remember that The Various Business Exit Strategies: How To Sell, Merge Or Close A Business not all data are equally relevant. Investors at stage 1 don’t need have access to cap tables and shareholder certificates.

Poor document structure

Before you upload your files to an VDR be sure that they are organized and labeled properly. This will make it easier for the buyer to understand the contents and structure of your document. For instance, using a standard filing system with consistent file names and the use of tagging and indexing systems will allow users to locate documents. Furthermore, using summaries or diagrams of key elements will support users in understanding the complexity of documents. Also, having a clear procedure to eliminate old files will cut down on clutter and improve overall user experience.

Overstating security

Some companies go overboard with saying that their secure data rooms are extremely secure. It’s like a food producer boasting about the nutritional value of their cereal bar as it’s low in fat while they should be focusing on whether the product is a good fit to the market it is intended for.