A data room is an online platform that allows companies to conduct due diligence, share documents, and organize Q&A sessions in a controlled, secure environment. It is utilized by a variety of industries and is an essential tool in M&A as well as fundraising, IPOs and joint ventures. Data rooms are used to store large, secure documents and to share them with various parties.
If you’re raising funds, attempting to increase your market or simply communicating with customers the information you share through the data room will vary by stage and will depend on the overall narrative that you are supporting. There are some best practices to follow to make a memorable data room presentation.
Avoid leaking confidential information to those who shouldn’t have access to it. This is one of founders “worst fears” and can happen when they’re not careful. For instance, if you are looking to raise a Series A round, don’t send your entire investor data room to people who aren’t interested in investing. This will slow down the process and can sour momentum.
Check that your platform is accessible and that you are using a data room provider that is PCI DSS compatible. This industry standard requires strong security including secure access control and storage of data encryption of communications, as well as regular security tests. It is crucial to know who viewed what. The simplest and most effective method of doing this is by using document versioning.