What is an Investor Data Room?

Investor data rooms are places where startups can save due diligence documents to be used by potential investors or acquirers during a financing round. These are documents that do not fit into an pitch deck or slideshare presentation, and that prospective financial backers must examine prior to investing or sign off on a term sheet.

These documents are http://vdrtechnology.info/how-is-deal-management-software-different-from-other-solutions/ essential to investors since they aid them make quicker decisions and more efficiently, which can reduce the time investment managers have to spend on the deal. They also can feel like being part of the startup team. This helps build confidence and provides more informed feedback.

The most secure investor data rooms also provide startups visibility into who is accessing what information, which helps ensure that confidential documents don’t end up into the wrong hands. Transparency allows startups to customize their interactions with investors, and improve the results of any transaction.

In the event of a crisis, a shared folder could be used as an investor data room for seed or angel investors, but specifically designed software is a much better option, especially for Series A rounds and beyond. A cost-effective, professional-grade data room software solution comes with more features than the consumer-grade tools, including advanced file search capabilities as well as advanced security structures. Some even offer digital rights management (DRM) which encrypts files, ensuring that they cannot be edited, copied or printed by anyone outside the platform. CapLinked’s product for investor data rooms for instance, offers this feature as well as other.