How to Run an Investor Data Room

https://dataroomproducts.com/virtual-data-room-for-businesses/

A VC or investor has expressed an interest in your startup, and asked for more details. They want to verify what you’ve shared in your pitch and are seeking granular details on your business’s structure and financials. An investor data room can help.

Making the right choices can mean the difference between winning and losing investment deals. Investors are busy people and don’t have the time to go through lengthy processes. You must be prepared when an investor is approached. With the right information in the virtual data room will help both parties save time, and also show that you’re serious about fundraising.

To manage an investor information room effectively, you should start by establishing an organized structure for your folders with logically identified subfolders. Include only the documents investors need to complete their due diligence. This will be different at every stage of the deal flow, but generally, it will include the following:

IP Information (patent filings, trademarks and intellectual property)

People-Related Documentation (resumes, employee stock agreements and other documentation regarding hiring)

Financial Information (historical & projected) which includes assumptions and sources, and the reasoning behind these projections

You should consider incorporating documents to prove that your startup is in compliance with national, local and international regulations. This is a great method of proving to investors that your business is in compliance with local national or international regulations. Not to mention, include sustainability documents in the long-term (e.g. carbon emission reporting system or other environmental sustainability metrics). Using a virtual data room that includes analysis of file access can allow startups to prepare for the possibility of meetings with investor stakeholders. This will lead to stronger conversations and a better understanding of the issues investors are most interested in.