An investor data room can be a very useful tool for startups trying to raise seed/angel funds or Series A financing. It could be a major element in a potential backer’s decision to partner with you or offer you an agreement. It is typically utilized to streamline due diligence.
When setting your data space, it’s important to anticipate what potential backers might need to see and supply them with the required documents in a neat arrangement of folders. This will help keep the process moving smoothly and reduce the possibility of any miscommunications or delays.
One of the most frequent requests is for detailed financial reports. These are usually requested by VCs and investors to verify the numbers they saw in your pitch deck (and to make sure they’re matching up). It’s also a good idea to include a company organizational/formation document in this section as well (company bylaws, business certificates, Tax ID information etc).
Additionally, it is crucial to provide a thorough list of any intellectual property that you own. It is easy for entrepreneurs to boast about their IP in a pitch, but it is important to back this up with detailed patent filings, trademarks, and other documents that will give prospective investors an overview of your startup’s assets.
It’s likely that you have already presented your investor pitch before investors seek access to your dataroom. However, it is a good idea to also include this in your room, even if only as an example. This will let investors know that the information they’re seeing in your data room is accurate and up to the minute and is based on your most recent pitch.