A data room for investors is a repository online of important documents that are used to conduct due diligence prior to the funding round, M&A transaction or other business-critical event. It speeds up the process by eliminating duplicated documents, lengthy email threads and outdated versions sent out by mistake. Investors are able to access the information they need through one dashboard that is easy to navigate.
If you are raising either a Series A or a seed round, establishing an investor data room is a great practice that helps reduce friction in the investment process and allows entrepreneurs to concentrate on building their companies. There are many tools and platforms available to host an investor dataroom. However, it’s essential to select one that offers an intuitive interface for both you and those who will be looking page over your materials.
Included in a stage one investor data room should be the company’s bylaws and articles. Also include business certificates, tax ID numbers as well as any other relevant documents. It is also an excellent idea to include any market research and competitive analysis that’s pertinent to your business.
Be sure to include your most recent presentation deck in the data room. This will allow investors to quickly reference the numbers and projections you have shared in your presentation and due diligence. It is also possible to include a short update for investors to provide investors with a brief overview of the progress your company has made.