Data rooms are often used to conduct due diligence for mergers and acquisitions, however they can also be beneficial for raising capital. Startups might want to utilize a data room to share documents with investors, particularly if they are in the closing stages of a fundraise. A data room with the right features can streamline communications and increase investor trust.
Typically data rooms include a dashboard, which will provide a snapshot of recent activity and notifications. Users should be able to customize their dashboard view and also alter their security and notifications settings. Upon logging in users will be asked to provide their email address, agree to the Terms of Privacy and Use and modify their password security settings.
Once users have logged in, they will be able access and download documents. A data room must have an index to aid users locate the document they are seeking. It must also be simple to edit if necessary. Furthermore, a data room should be able to track engagement on individual documents.
A data room should contain a Q&A section where questions can be asked. The platform can categorize questions, responses and even identify specific words and phrases that should be redacted using its proprietary artificial intelligence engine. The system can mark these sections of text with the red flag and label them appropriately for future reference.
