A data room is a crucial instrument to conduct due diligence, whether raising Series A funds or negotiating an acquisition, merger, or investment deal. It allows you to organize all documents into one location and let third-party users access the data in real-time, without the need to send email or ask for updated copies.
While it’s tempting to cram your investor data room with everything you’ve got, be careful not to overwhelm your potential investors. Too many documents can make the due diligence process difficult and time-consuming for both sides. A well-organized and read review organized dataroom is vital for ensuring that investors can quickly and efficiently evaluate your company’s financial health as well as operational strategies and legal status.
Investors will be interested in your business’s projected and historical financial statements. They will also want to know the source of any assumptions or modeling, as well as the reasons behind these. You may also include a list of previous financing agreements, capitalization tables and other details. Entrepreneurs who have a compelling pitch that draws VC interest typically include a copy in their data room.
The most important thing is that your investor data room should have clearly defined headlines for each slide. If the titles of a technical slide show are unclear or inaccurate, it can be difficult for investors to read. Avoid using non-standard analyses instead of the standard ones (e.g. showing part of the Profit and Loss statement as opposed to. an entire view).