The majority of people consider data rooms an instrument to complete due diligence during mergers and acquisitions (M&A), but they can also be helpful in capital raising. Startups may consider using data rooms to share documentation with investors, particularly if they are in the final stages of a fundraise. With the right features, a room can help streamline communications and boost investor confidence.
Typically data rooms include a dashboard that provides an overview of recent activity and notifications. Users will be able to alter the dashboard view as well as alter the security settings and notifications. Upon logging into the system, users will need to enter their email address, confirm the Terms of Use and Privacy Policies and change their password security settings.
Once users have logged in, they’ll be able view and download find this documents. A data room should contain an index that enables users to find the document they’re looking for, and most important the ability to edit the document if needed. Furthermore, a data room should be able to track the amount of engagement with each document.
A data room should contain a Q&A area where people can ask questions. The platform can categorize responses, questions and even pinpoint specific phrases and words that need to be censored using its proprietary artificial intelligence engine. The system will mark these portions of text with a red flag and mark them accordingly for future use.