Using a Data Room to Store Intellectual Property and Other Important Documents
Traditionally, businesses kept important documents in a secure room that possible buyers could access during due diligence. These documents are now stored digitally in data rooms. Investors have access to information such as your articles of association as well as patents, intellectual properties, and the legal structure of your company including contracts that govern stock vesting, as well as the cap table (which breaks down who owns what) prior to committing to invest in your company.
If you’re in the process of preparing for an exit, investor or acquisition, it’s crucial to have the right documentation completed in a timely manner. This speeds the process and lowers the risk of missing an important element.
Virtual data rooms provide the security of sharing and storing information related to IP and licensing. Security features like audit logs, user permission settings as well as printing/download restrictions and watermarking prevent leaks of information and data.
Lawyers typically deal with large volumes of confidential material in a lawsuit. Virtual data rooms are a great method of handling this material due to their robust encryption techniques and granular security controls. VDRs permit lawyers to collaborate with clients and share documents while keeping the privacy.
When you start pitching investors, a data room for investors should be set up so that they have access to all the information necessary during due diligence. This will ensure that they understand what you’re selling and make an informed decision about whether or not they’d like to partner with you.