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When your startup wants to raise capital, the first meeting ends with a request from potential investors to gain access to your “dataroom.” But what does that actually mean? What should it include?

A dataroom is a safe repository for company documents. Its purpose allows authorised persons to safely review sensitive information. It is commonly used in M&A due diligence and in other business processes involving the exchange of large volumes of confidential data. The best online data rooms offer security protocols, standards for removing and replacing information and software search functions to ensure that only authorized personnel can view the information.

Using a data room saves time and effort compared to the traditional method of printing and handing over hard copies. The data is accessible from anywhere, provided that you have internet access and a computer. By creating a virtual room, you can ensure that the information you store is protected from natural disasters and fire.

Consider how many employees you will need to access the data room and their technology capabilities when choosing a provider. Look for a platform that offers free trials so you can experience how it works before investing in it. It’s worth asking your friends and colleagues what platforms they prefer, or if they can recommend any. This will allow you to narrow down your choices and make the best decision for your situation.