Traditionally, companies stored important documents in a secure location that buyers could access with due diligence. These documents are now digitally stored in data rooms. Investors can view information like your articles of association, your patents, your intellectual property description as well as the legal structure of your business. This includes contracts, stock vesting and a cap-table (which lists who owns what).
If you’re planning for an exit, investor or acquisition, it’s important to have the proper documentation completed in a timely manner. This will speed up the process and reduce the chance of missing something crucial.
Virtual data rooms offer secure environments for sharing and storing IP and licensing documents. Security features such as audit logs and user permissions settings, watermarking, and printing/download restrictions assist in preventing information leakage and data breaches.
Lawyers are often confronted with large volumes confidential documents in a trial. Virtual data rooms are the ideal way to manage this material because of their strong encryption methods and their precise security controls. VDRs also permit lawyers to collaborate on documents with clients while protecting the confidentiality of sensitive information.
A data room for investors must be set up immediately you begin pitching investors to ensure that they have access to all of the information you need to share during due diligence. This will help them comprehend what you’re selling and make an the right decision as to whether they’d like to join up with you.