Avoiding Data Room Setup Pitfalls

A virtual data room that’s easy to use and secure is essential for any startup looking to speed up their fundraising process. However, establishing a VDR that is effective isn’t an easy task. By following these best practices, you will avoid the https://otherboardroom.com/board-software-pricing-hidden-costs-and-budgeting-tips/ most common mistakes.

Too too much information

It’s tempting to include every bit of relevant information that you’re required to submit in a stage 1 data room but this could distract investors and may dilute the significance of important information. It’s also important to note that not all data is equally important. Investors in stage 1 do not need to have access to cap tables or shareholder certificates.

Poor document structure

Before you upload your files onto an VDR, ensure that they are arranged and labeled appropriately. This will allow buyers to comprehend the structure and content of your document. For instance, a standardized filing system with consistent file names, and the use of tags and indexing systems will make it easier for users to locate documents. Furthermore, using summaries or outlines of key points will support users in understanding complex documents. Additionally, creating a clear and concise procedure for the removal of old files will reduce clutter and improve the overall user experience.

Overstating security

Some companies go overboard with saying that their secure data rooms are highly secure. It’s like a cereal bar manufacturer bragging about its nutritional benefits because it contains zero fat while they should be focusing on whether their product is compatible with the market it is intended for.