Avoiding Data Room Setup Pitfalls

https://mac-interactive.com/5-simple-no-designer-tools-for-structuring-your-data/

A safe, user-friendly virtual data room is a must for any startup that wants to speed up the process of fundraising. But creating the VDR that is effective isn’t a simple task. By following these best practices, you can avoid the most frequent mistakes.

Too many details

It’s tempting to include every bit of relevant information you have to hand in the stage 1 data room but this could distract investors and can diminish the impact of important information. It’s important to remember that not all data is equally relevant. For instance, investors at stage 1 do not require access to cap tables or shareholder certificates.

Poor document structure

Before you upload your files to a VDR be sure that they’re organized and labeled properly. This will make it easier for the acquirer to understand the content and structure of your document. Users will be able to locate files if they employ a standard filing system, consistent file names and indexing or tagging systems. The use of summaries and outlines can help users comprehend complex documents. Also, having a clear procedure to eliminate old files will eliminate clutter and enhance the overall user experience.

Overstating security

Some companies go overboard with declaring that their secure data rooms are extremely secure. It’s the same as the cereal bar company boasting about its nutritional benefits because it’s fat-free, when they should focus on whether the product fits the intended market.