If you’re in the process of raising Series A financing or trying to conclude a merger, acquisition or investment deal, the data room for investors is an essential tool to conduct due diligence. It allows you to consolidate all documents in one place and permit third parties to access the information in real-time without having to send an email or request updated copies.
While it’s tempting to fill your investor data room with all the information you have, be careful not to overwhelm your potential investors. Too many documents can create due diligence a long and difficult process for both parties. A well-organized dataroom is crucial to ensure that investors can quickly and efficiently evaluate your company’s financial health as read this post here well as operational strategy and legal standing.
Investors will want to have access to your startup’s past and future financial statements, which include the source and reasoning behind any assumptions and models. You may also choose to include a list of current and past financing agreements and capitalization tables. Entrepreneurs who have a compelling enough pitch to draw VC interest often upload a copy of their pitch deck in their data room as well.
Your investor data room should have clearly defined headlines on each slide. If the titles of a technical presentation are unclear or inaccurate it could be difficult for investors to follow. Avoid using non-standard analyses in place of the standard ones (e.g. showing a portion of the Profit and Loss statement as opposed to. a full view).