A VC or investor has shown an interest in your venture and is asking for more information. They want to verify what you’ve shared in your pitch and want to see granular details on your business model and financials. An investor data room could help.
The difference between the winners and losers of an investment deal can be determined by getting it right. Investors are busy and don’t have time to go through lengthy processes. It is essential to be prepared as soon as the prospect of investing comes up. Having the right information in the virtual data room will save both sides time and prove that you’re committed to fundraising.
To run a successful investor data room, you must begin by creating a folder structure which is clear and logically labeled. Only include the documents that investors will need to complete their due diligence. This will vary at each stage of the deal process, but generally includes the following:
IP Information (patent filings and trademarks)
Documentation on people (resumes and employee stock agreements and documents regarding hiring).
Financial Information (historical and projected) including assumptions, sources and reasoning behind these projections
Consider incorporating documentation to prove that your venture is in compliance with national, local and international regulations. This is an excellent method of proving to investors that your business is in compliance with local and international regulations. Finally, consider including documents on sustainability for the long-term (e.g. carbon emissions reporting system or other measures to sustain the environment). Using a virtual data room that includes data access analytics can help startups to actively prepare ahead of meetings with investors and other stakeholders. This will lead to better conversations and a greater understanding of the questions that investors are most concerned with.