A VC or investor has expressed an interest in your company and wants to see more data. They want to verify the information you’ve stated in your pitch and are looking for granular details about your business’s model and financials. This is where an investor data room comes in.
The difference between the winners and losers of an investment deal can be determined by executing the right strategy. Investors are busy people and don’t have time to go through lengthy processes. You need to be prepared when a potential investor approaches. With the right information in the form of a virtual data room can save both sides time, and also show that you’re serious about fundraising.
To manage an investor data room effectively, you should begin by creating an organized structure for your folders with logically labeled subfolders. Include only those documents that investors require to complete their due diligence. This will differ depending on the stage of the deal’s process, but generally includes:
IP Information (patent filings and trademarks)
Documentation regarding people (resumes and employee stock agreements and also documentation regarding hiring).
Financial Information (historical and projected), including assumptions, sources, and the reasoning that underlie these projections
You might want to consider adding documentation to show https://dataroomproducts.com/ that your company is in compliance with national, local and international regulations. This is a great way to set investors’ minds at ease in the beginning and help them feel secure that the business is operating legally. Don’t forget to include files on sustainability over the long run (e.g. carbon emission reporting system or other environmental sustainability metrics). A virtual data room that includes analytics on file access can help startups prepare for meetings with investors. This can lead to more productive conversations and an improved understanding of the concerns investors are most concerned about.