How to Prepare an Online Data Room for Investors

A data room is a digital platform that allows startups to upload important documents to ensure due diligence prior to a financing round or an M&A deal. This could include, for instance the company’s financial projections as well as detailed IP documentation. This information is available prospective investors, who are able to use it to make informed decisions when investing in a start-up.

Founders are able to include the following information when creating an investor data room:

Pitch Decks or Whitepaper Founders can upload their pitch decks and a whitepaper that describes the way in which their product or service addresses the complex problem or market in a clear manner and is profitable. This document will help establish trust with investors and demonstrate their accountability.

Projections: Founders should include both historical and projected financial statements, which include the assumptions, sources, and reasoning behind the projections. This can streamline the due diligence process and help investors understand the company’s forecasted financial performance and growth potential.

People-Related Documents: The founders can include resumes of the team members who are key to their success and any employee stock agreements or documents regarding hiring. Founders may include their growth plan and go-to-market strategy.

Investor Updates: Throughout the fundraising and due diligence process, founders may add a series updates to the VDR. This keeps investors informed of the business’s progress and allows them to know that the company is committed to getting the most value from the investment.

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