The dataroom is a vital tool in many stages of the fundraising process. A virtual data room is an excellent tool to build trust and speeding the funding process.

In the initial pitch stage startups can make use of its data room to share both historical and projected financials including capitalization tables, product pricing information, and projections. The ability to control access to information in a granular manner is crucial, as it ensures that only relevant information gets in the right hands. Startups can control who sees and when they see it by using features like expiring links, watermarking and password protection.

In the next phase of the fundraise startups can provide information about the company’s staff, including resumes, and employee stock agreements, as well as market information such as market size, growth rates and the competitive landscape. Comprehensive bios of team members can help to build trust by showing that the founders have the skills and networks to expand the business.

At the end of the fundraise, a startup may include a term sheet or other documents to ensure investors can get their approval on the investment. Due diligence will then commence. In addition, some startups will send regular investor updates throughout the year to keep prospective investors informed of progress and to demonstrate continued momentum.

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