Whether you’re raising funds, or simply making sure your business is equipped with the information that it requires to succeed, a virtual data room is essential. Not only does it help you organize and store files in a safe environment but it also the necessity of a data room checklist for startups simplifies due diligence and valuation procedures.

During due diligence, investors and acquirers want to have access to the most complete information available to determine whether or not a startup is worth investing in. If the company isn’t able to provide this information, the process may be delayed and could even derail the deal. It’s essential to create an investor data room prior to seeking investments.

The exact contents of your investor data room can vary depending on the size of your company and the complexity of your business. One option is to create folders for specific kinds of information or project stages. Within these folders, you may create subfolders to organize your files into simple-to-read structure.

Another factor to consider is the security level of each file. You should consider setting specific permissions for sensitive information. Certain providers let you set up group rights which grant access to certain categories of professionals, or entire departments, like accountants and investment bankers. This makes it simpler to grant access to proper individuals and speed up the process. This is particularly relevant when a startup is going through multiple rounds to conduct due diligence or is preparing to sell.