A VC or investor has shown an interest in your company and wants to see more data. They want to confirm the information you’ve presented in your pitch deck and are seeking more detailed information about your business model, traction and financials. This is where an investor data room comes in.
The difference between winning or losing an investment deal can be determined by doing it the right way. Investors are busy people and don’t have time to spend on lengthy processes. It is essential to be prepared when the prospect of investing comes up. The right information in the virtual data room will save both sides time, and also show that you’re serious about fundraising.
To operate an investor data room efficiently, you must begin by establishing a clear folder structure with clearly labeled subfolders. Only include documents that investors require to complete their due diligence. This may differ at each stage of the deal process, but typically includes the following:
IP Information (patent filings, trademarks and intellectual property)
People-Related Documentation (resumes and employee stock agreements and documents on hiring)
Financial Information (historical and projected) including assumptions, sources and reasoning behind these projections
You could also consider incorporating documents that show your startup is in compliance with national, local or international regulations. This is an excellent method to assure investors that your business is in compliance with local national or international regulations. Not to mention, include sustainability-related documents over the long term (e.g. a carbon emission reporting system or other measures of environmental sustainability). A virtual data room that includes analytics on file access can assist startups in preparing for meetings with investors. This will lead to stronger conversations and a better understanding of which concerns investors are most concerned about.
https://dataroomproducts.com/virtual-data-room-for-businesses/
Leave a comment