Investor data rooms allow companies to present a complete overview of their business that is concise and complete, reducing the requirement for due diligence and making the valuation process faster. Unlike hardcopy documents, which are often difficult to share, upload and download, online document management tools enable streamlined sharing and secure sharing.

Investor data rooms can also assist to ensure compliance with regulatory requirements and cybersecurity standards, which ensures responsible investing. They are able to provide access to audit reports, penetration testing reports and other data that support startups’ ability to tackle and reduce risks for investors.

Companies should only include data that is relevant to their business when they create an investor data room. The sharing of too much information can be too overwhelming and distracting, leading investors to become confused or create an impression that you don’t know the KPIs of your business.

A data room for investors must have a well-organized folder structure to make navigation easier and avoid confusion. It should also permit document merging and annotations, so that users can make notes or comments to files within the VDR. The top investor data rooms come with activity dashboards that provide a central view of all user actions, including document views and downloads forwards, as well as prints. This is a valuable tool for tracking the process of due diligence and to ensure compliance during the business valuation process. Additionally, some VDRs include an inbuilt Excel viewer with formulas to simplify data analysis and processing during the financial analysis portion of the process of business valuation.