Once a company has convinced investors they are ready for due diligence the next step is to share their « dataroom ». The data room is a virtual storage area that houses the files that investors want to review and helps the company organize the files in a way that makes it easy for them to locate and comprehend.

Traditionally this process was carried out in a physical room, however now it is most commonly conducted online through what are referred to as virtual data rooms. They are designed to provide a safe environment for companies to store sensitive information.

It means that companies can save money by paying for the software they need and not having to pay a security team who monitors the physical space. There are a myriad of virtual data room providers, and they all come with various features and prices. It is crucial to do research and find the one that is suitable for your company.

For instance, some provide an easy document management feature while others like iDeals, Citrix or Datasite provide more advanced tools such as multilingual search, custom analytics and data tracking, OCR and smart AI categories for documents, among other features. Once a startup has decided on a provider, it should determine what documents to include and what sort of folder structure will work best for their requirements. It is important to put together financial information, legal documents and contracts and other related information to make it easier to access for prospective buyers.