A virtual dataroom (VDR) can be a data room software powerful tool to secure and manage important documents in the business. Startups are increasingly using them to maximize the value of transactions and speed up due diligence. In this article, we’ll look at the reasons it is that a VDR is beneficial in startup fundraising and give some tips to help build one.

Startup founders must be a bit grueling when it comes to convincing investors that their company is the right fit. As such, it’s important to be as transparent as you can about your business. This will ensure that due diligence is not prolonged unnecessarily, and that investors are provided with the information they require to make an informed decision.

One way to do this is to set up an investor data room. This is a secure, online repository that holds the information your investors require to know in their due diligence. This includes a complete overview of your company (an organizational chart and eventually a hiring strategy) and financials (income statement, balance sheet, projections and more) and the cap table which lists all the various buying options for your company such as preferred stock, common stock, and convertible debt.

It is worth including any public reports or market research that highlights your company’s unique positioning in the industry. Additionally, a section highlighting customer testimonials and references can be a great way to demonstrate how valuable your team’s expertise is.