Whether you’re in the process of raising Series A funding or trying to conclude an merger, acquisition or investment deal, an investor data room is a vital tool for due diligence. It lets you organize all of your documents in one place and let third-party users access the data in real-time, without having to send an email or request updated copies.
While it’s tempting to fill your investor data room with everything you’ve got but be mindful not to overwhelm potential investors. Too many documents can make the due diligence process difficult and time-consuming for both parties. A well-organized data room is key to ensuring that investors can quickly and easily assess the company’s performance, operational strategy, financial health and legal standings.
Investors will be interested in your company’s projected and historical financial statements. They’ll also want to know the source of any assumptions or models, as well as the rationale behind them. You can also include an inventory of dataroomnote.com/data-room-cost-and-its-relevance-with-service/ recent and previous financing agreements and capitalization tables. Entrepreneurs who have a compelling pitch that attracts VC interested investors often put a copy of their pitch in their data room.
Your investor data room needs to have clearly defined headlines on each slide. If the titles of a technical presentation are unclear or inaccurate it may be difficult for investors to read. Avoid utilizing non-standard analyses instead of standard ones (e.g. showing only a portion of a Profit & loss statement as opposed to a full one).