How Startups Can Use a Data Room to Share Documents With Investors

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Data rooms are commonly used to complete due diligence during mergers and acquisitions, however they can be useful for raising capital. Startups may consider using data rooms to share information with investors, particularly if they are in the final stages of a fundraise. A data room with the right features can simplify communications and improve investor confidence.

A dashboard is usually found in a data space, and provides an overview of the most recent notifications and activities. Users should be able configure their preferred view of the dashboard, as well as modify their security and notifications settings. When logging in users will be asked to enter their email address, sign up to the Terms of Privacy and Use and then adjust their password protection settings.

Users will be able to view and download documents after they have logged in. A data room should contain an index that allows users to quickly locate the document they’re looking for, and, perhaps most important, it should be easy to edit the file if needed. A data room should also be able keep track of the number of people who have used specific documents.

A data room should include an area where questions can be asked and answered. The platform can categorize the responses to questions and even pinpoint specific words and phrases that should be redacted using its proprietary artificial intelligence engine. The system can then mark these sections with an arrow of red and mark them accordingly as a future reference.