Creating a Data Room for Investors

If you’re in the process of raising Series A http://dataroomnote.com/boosting-investors-confidence-with-ipo/ funding or trying to close a merger, acquisition or investment deal, the data room for investors is a vital tool for due diligence. It lets you organize all documents in one place and allow third parties to access the information at any time without the need to send emails or request new copies.

It’s tempting but you don’t want to burden your investors. The accumulation of too many documents can make the due diligence process lengthy and frustrating for both parties. A well-organized data room is essential in ensuring that investors can quickly and efficiently review your business’s performance, operations strategy, financial health and legal standing.

Investors will be interested in your business’s projected and historical financial statements. They’ll also be looking for the origins of any assumptions or models, as well as the rationale behind them. It is also possible to include a list of your previous financing agreements, capitalization tables and other information. Founders with a strong pitch that draws VC interest typically upload a copy in their data room.

Most importantly, your investor data space should include clearly defined headlines for each slide. If the titles of a technical presentation are unclear or inaccurate it could be difficult for investors to read. Avoid using non-standard analyses instead of conventional ones (e.g. showing a small portion of the Profit & Loss statement vs. an entire view).