Data rooms are used for due diligence purposes in M&A transactions, fundraising or any other transaction requiring sharing of sensitive data. They are a better alternative to email and free file-sharing service. They provide granular permissions and security features like encryption, two-factor authenticaiton and watermarks.
The amount of information needed to conduct due diligence will differ depending on the scope and complexity of the project, but it is essential that all parties have the ability to access the same documents. A central data room with a clear folder structure, standard document titles, and an index that is master-like makes it easy for people involved in the process to locate information and navigate. The organization of documents into subfolders that are similar can also streamline the review process.
During the presentation of data, it is crucial to emphasize the most needle-moving KPIs and not overwhelm slides with irrelevant information. It is also essential to not share non-standard analysis which could make investors confused and can mislead their expectations of the company’s growth and health.
It’s also beneficial to include an overview slide at end of each deck, highlighting the main points and conclusions you wish the audience to take away from the presentation. It makes it easier for investors to switch between more in-depth analysis of the numbers and the bigger view.
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