A data room online for investors is a digital platform where startups upload important documents that are relevant to due diligence prior to a financing round or an M&A transaction. Typically, this includes the company’s financial projections and detailed IP ownership documentation. The information is then accessible to investors who are interested and could assist them in making an informed decision about investing in the start-up.
Founders should include the following information when creating an investor data room:
Pitch Decks or Whitepaper Founders may upload their pitch decks as well as a whitepaper that describes the way in which their product or service addresses complex problems or markets in a clear manner and is profitable. Adding this document will help establish trust and show the company’s accountability to investors.
Projections: Founders should include both historical and projected financial statements, including the assumptions, sources and logic behind the projections. This will streamline the due diligence process and help investors understand the company’s projected financial performance and growth plans.
People-Related Documents: Founders may include resumes of the team’s key players as well as any employee stock agreement or other documentation for hiring. Founders may include their growth plan and their go-to-market strategy.
Investor Updates During the fundraising and due-diligence process, the founders could include a series of investor updates to the VDR. This keeps investors informed about the business’s progress and allows them to know that the company is committed to making the most of the investment.
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