A data room is a secure virtual space for sharing documents and confidential business details with other parties. The platform is usually used for mergers and acquisitions as well as due diligence and fundraising. It allows for a safe exchange of information, and also prevents sensitive documents from getting into the hands of insecure individuals.

The best data rooms have an organized structure for folders and indexing, allowing users to search for information through topic or file name. Some allow for the control of version numbers, which means that everyone is working with the most recent version of a document and easily track changes. PandaDoc is a well-known service of storage for data, offers the above features as well as custom analytics and tracking downloads, watermarking documents and a safe cyber environment.

The first step to create an information room is to choose what documents should be included. Typical areas include legal (Articles of Association, IP registrations), financial (profit and loss statements, balance sheets), and company documents and a current cap table that clearly indicates who owns which percentage of the company. It is essential not to divulge any other data that are not standard, like non-standard analysis that aren’t relevant to the present or future performance of the business. It is also beneficial for you to keep track of all users who have access to your data room. This allows you to eliminate the ones who aren’t required and update permissions for those who still need access. This will ensure that only the most current and up-to date check this information is available to look at.