Traditionally, companies stored important documents in a safe room that potential buyers could access during due diligence. These documents are now stored digitally in data rooms. Investors can access information like your articles of association along with your patents, intellectual property and the legal structure for your business. This includes contracts, stock vesting and the cap-table (which determines who is who).
It’s find out this here crucial to have correct documentation ready in a timely manner when you’re planning an investor, a sale or an acquisition. This speeds up the process and reduces the chance of missing something important.
Virtual data rooms provide the security of sharing and storing documents relating to IP and licensing. Security features like audit logs as well as user permission settings watermarking, and restrictions on printing/download assist in preventing information leakage and data breaches.
Lawyers are often faced with large volumes confidential documents during a case. Virtual data rooms are the ideal method to manage this information due to their robust encryption methods, and granular security controls. VDRs also allow lawyers to collaborate on files with clients while keeping the confidentiality of sensitive information.
An investor data room should be created at the time you begin making pitches to investors so they can view all of the information you need to share during due diligence. This will help them understand what you are offering and help them make an the right decision as to whether they would like to team with you.