Folderit Offers a Virtual Data Room for Startups to Conduct Investor Due Diligence

For entrepreneurs, due diligence is an essential step to raising capital. In contrast to sharing files via email an online data room lets founders have total control over the documents they provide to investors. Using Folderit entrepreneurs can ensure that investors are only provided with the files they need to view and nothing else.

The content of an startup’s investor data rooms varies based on the industry, but most include documents that are relevant in the due diligence process. For example the life science industry will require clinical trial results as well as HIPAA compliance information. These documents are usually too large to be shared via email. A virtual data room is a better method to share these documents with investors.

Investors perform due diligence in order to assess a startup’s potential and reduce their risk. The fact that they have all the necessary information in one place makes the process more efficient and easier. It also shows that the founders take their investors’ time seriously, which is important for the majority of backers.

Since investors are limited in their budgets, it’s important for startups to choose a company which has a flat cost structure. Startups who are still fundraising can benefit from a per-page pricing model for text documents. This is less expensive than a subscription plan that provides unlimited storage and users. A trial offer allows startups to test the platform of their provider and practice reenacting presentations with investors, and sketch out the layouts of official statement documents.