A safe, user-friendly virtual data room is essential for any startup seeking to accelerate its fundraising process. But creating an VDR that is successful is not easy. The most frequent mistakes can be avoided by making sure the following best practices are in place:
Too much information
It’s tempting to include every piece of relevant information that you need to provide in a stage 1 data room, however this could distract investors and could reduce the impact of important information. Remember that not all data are equally important. For instance, investors at stage 1 do not need access to cap tables or shareholder certificates.
Poor document structure
Make sure your files are labeled and properly organized before uploading them to a VDR. This makes it easier for buyers to comprehend the content and structure of your document. Users will be able to locate files if they employ an established filing system that uses consistent file names, as well as tagging or indexing systems. The use of summaries and outlines can help users comprehend complex documents. Additionally, creating a clear and concise procedure to remove old files will help reduce clutter and improve the overall user experience.
Overstating security
Some companies claim that their secure data rooms are ultra-secure. It’s like a cereal bar maker boasting about its nutritional value because it’s fat-free and sugar, but they should concentrate on whether the product is suitable for the market it is intended for.
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