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Investment in startups typically involves a significant exchange of data and documents which is why it’s imperative that the information is protected and organized. VDR for Investors is the answer. It lets entrepreneurs and other stakeholders to conduct their due diligence in a safe manner and with full transparency.

It’s essential to think through the way in which your VDR will be organized, especially if it’s an investor-only VDR. You want to categorize files based on how they will be used by investors and other people involved in the process of investing. Your taxonomy shouldn’t only reflect your preferred arrangement, but also be clear to them. It’s also a good idea to prioritize features like drag-and-drop file uploads, and preset permissions that are easy to alter.

It’s recommended to include information that does not require a confidentiality contract (CDA). For instance, office leases for small spaces and employee offer letters and personal correspondence should not be included in an investor VDR unless they play a crucial part in the company’s operational model or potential growth. Also, you shouldn’t include any information that is protected by the attorney-client privilege. This kind of sensitive information could lead to legal problems down the road. A good method to keep from sharing sensitive information is to use a virtual data room’s document watermarking as well as viewing-only permissions features. You can monitor access metrics on a granular level and avoid unnecessary disclosures. These features can also aid in building trust with investors in your VDR by making it clear to them that the data will only be viewed and accessed by authorized users.