What is a Data Room and Why Should Startups Use One?

When your startup is ready to raise money, the first meeting with potential investors often ends with a request for access to your «data room.» What does it mean exactly? 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 widely used in M&A Due Diligence and in other business transactions involving large volumes confidential data. The best data rooms online offer security protocols and standards for removing or replacing information as well as software search functions that ensure only authorized personnel have access to the information.

Data rooms are more efficient and time-saving than traditional methods of printing and distributing paper copies. And the data can be accessed from anywhere in the world – so long as find this someone has an internet connection 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 need access to the data room, and what their technological capabilities are. You should look for platforms that offer free trials to see how they work before you invest. 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.