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 confirm the information you’ve put in your pitch deck and are looking for more specific information about your business model, the traction of your company and financials. This is where an investor data space is a must.
The difference between winning or losing an investment deal can be determined by making sure you do it right. Investors are busy and don’t have the time to waste on slow processes, so you need to be ready as soon as an interested investor comes in. With the right information in a virtual data room will save both sides time, and also show that you’re committed to fundraising.
To create a successful investor data room, you should start by creating an organizational structure which is clear and logically labeled. Include only the documents that investors will need to complete their due diligence. This will differ in each stage of the deal process, but usually includes the following:
IP Information (patent filings and trademarks)
People-Related Documentation (resumes, employee stock contracts and documents on hiring)
Financial Information (historical and projected), including assumptions, sources, and the look at these guys reasoning underlying these projections
You might also consider adding documentation to show that your business is compliant with local, national or international regulations. This is an excellent way to put investors’ minds at ease early on and help them feel secure that the business is operating legally. Don’t forget to include sustainability-related documents over the long term (e.g. a carbon emission reporting system or other environmental sustainability measurements). A virtual data room that provides analytics on file access can help startups prepare for meetings with investors. This will lead to stronger conversations and a greater understanding of the issues investors are most concerned about.
