For entrepreneurs, due diligence is a vital step on their way to raising capital. A virtual data room gives founders complete control over documents they share with investors, unlike email. Folderit allows startup founders to ensure that investors only get the files they require.

The contents of an investor data room for startups will vary based on the business. However, most contain documents relevant to due diligence. A life science company, for example will require information about HIPAA compliance as well as clinical trials’ results. These types of documents are often too large to send via email, therefore the use of a virtual data room is the best method to communicate them to investors.

Investors conduct due diligence to assess a startup’s success potential and minimize their risk. Being able to have all the information they require in one place accelerates the process and makes it easier for them to make a decision. It also indicates that founders are taking their investors time seriously which is a crucial factor for many backers.

Due to investors’ restricted budgets, it’s essential that startups select a read this provider with a flat-fee structure. Startups that are still fundraising can benefit from the per-page pricing offered for text documents which is significantly less than a subscription-based model that offers unlimited storage and users. A free trial lets entrepreneurs to test the platform of their service provider, practice reenacting their presentations with investors, and sketch out layouts for their documents.