https://vdr.news/what-is-an-investor-data-room-and-what-to-include/

An investor data room is a secure online repository used to share sensitive documents during the process of fundraising or in a business transaction. Some critics claim that an investor data room can slow down the process of investing because it requires a higher level of diligence for investors from outside. Startups can benefit from a central repository of important documents if they select a virtual data room that is simple and use security measures that comply with the requirements of the industry.

Investor data rooms can be especially useful for storing crucial documents for startups, such as:

Financial documents include statements of profit and loss as well as performance reports. Documents related to technology, such as integrations, software architectures, and the existing product documentation. Human resources documents like resumes of founders and employees’ contracts. Other legal documents include articles of incorporation and bylaws. Investor updates can be saved in a database room for investors to be kept informed on the progress of the company during the process of fundraising and the due diligence period.

An investor data room could ultimately make the entire investment process more efficient and speedier for both internal and external parties. Startups can safeguard the privacy of their data by using features such as expiring hyperlinks, watermarking, password protection, and granular permissions to regulate who sees what and when. When choosing a virtual data room provider, investors should look for a pricing plan that offers flat-rate monthly or annual fees with unlimited storage and users as well as overage charges to avoid unneeded expenditures.