Avoiding Data Room Setup Pitfalls
A safe, user-friendly virtual data room is a must for any startup looking to accelerate its fundraising process. But creating the VDR that is effective is not easy. Most common mistakes can be avoided if the following best practices are in place
Too too much information
It’s tempting to include every piece of relevant data you’re required to submit in the stage 1 data room. However, this could be distracting for investors and can reduce the significance of important information. Remember that https://otherboardroom.com/board-software-pricing-hidden-costs-and-budgeting-tips/ not all data are equally relevant. For example, investors at stage 1 do not require access to cap tables or shareholder certificates.
Poor document structure
Before you upload your files onto a VDR be sure that they’re organized and labeled appropriately. This will make it easier for the person who is purchasing the document to comprehend the structure and content of your document. For instance, using an organized filing system that has consistent file names, and the use of tagging and indexing systems will aid users to find documents. The use of summaries and outlines can help users comprehend complex documents. In addition, having a clear process for removing old files will help reduce clutter and improve overall user experience.
Overstating security
Some companies go overboard by claiming that their secure data rooms are extremely secure. It’s like a food company boasting about the nutritional value of their cereal bar since it is a fat-free product when they should be focussing on whether the product is a good fit for its intended market.