How to Run an Investor Data Room
A VC or investor has shown interest in your startup and wants to see more data. They want to verify what you have shared in your pitch deck and are seeking more granular information on your business model, traction and financials. This is where an investor data space comes in.
The difference between the winners and losers of an investment deal can be determined by making sure you do it right. Investors are active and don’t have time for slow processes so you need to be ready to go when an interested investor approaches. The correct information in a data room can save both parties time and prove that you are serious about fundraising.
To manage a successful investor data room, you should start by creating a folder structure that is clear and logically labeled. Include only those documents that investors require to complete their due diligence. This may differ at each stage of the deal flow, but generally includes the following:
IP Information (patent filings, trademarks and intellectual property)
Documentation relating to people (resumes and employee stock agreements, as well as documentation regarding hiring).
Financial Information (historical and projected), including sources and assumptions, as well as the reasoning behind these projections
Consider incorporating documentation to prove that your venture is in compliance with local, national and international regulations. This is an excellent way to put investors’ minds at ease https://dataroomproducts.com/what-is-due-diligence/ 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 term (e.g. carbon emission reporting system or other measures of environmental sustainability). A virtual data room with data analytics on access to files can assist startups in preparing for meetings with investors. This will lead to stronger conversations and a greater understanding of the questions that investors are most interested in.
