Startups need to scale quickly. Whether it’s finding partners or investors, or news simply managing growth as the business expands Data rooms are a great solution. These virtual spaces allow startups to securely share sensitive data with the right individuals while ensuring the security of documents during due diligence and beyond.

The most obvious reason to use a startup data room is fundraising. It allows founders to impress investors with their business’s transparency and organization through providing a central repository of due diligence data.

Utilizing a VDR to share investor-specific information such as growth reports, financial updates and intellectual property with potential investors can strengthen the argument for why the startup should be supported with funds. Additionally, the built-in request management feature allows all due diligence documentation to be shared with investors in a single location, eliminating the need for Excel trackers and individual emails.

Some providers offer free trial periods to new businesses. This allows them to test the software and find features that could be beneficial. Through these trial periods, founders can practice presenting to investors and recreate how the VDR would function in a real due diligence process. This is crucial as it helps them determine which service providers will be most beneficial to their capital-raising process, without creating unnecessary expenses or causing delays. Additionally it allows them to focus on their pitching and negotiation strategy, rather than the technical aspects, startup data rooms can help speed up fundraising.