Creating a Data Room for Investors

http://dataroomnote.com/boosting-investors-confidence-with-ipo/

If you’re in the process of raising Series A funding or trying to conclude an merger, acquisition or investment deal, an investor data room is a vital tool to conduct due diligence. It helps streamline the collection of documents into a single repository, and allows third parties to access the information in real time without having to keep sending emails or ask for updated copies.

While it’s tempting to cram your investor data room with all the information you have available make sure not to overwhelm potential investors. Too many documents can make due diligence a long and frustrating process for both parties. A properly-organized data space is crucial to ensuring that investors can quickly and efficiently review your business’s performance, operations strategy, financial health and legal standings.

Investors should be able view your company’s historical and projected financial statements, which include the sources and reasoning behind any assumptions and models. It is also possible to include an inventory of current and past financing agreements and capitalization tables. founders who have a convincing enough pitch to draw VC interest will often upload a copy of the pitch deck in their data room too.

Most importantly, your investor data space should have clearly defined headlines on each slide. It can be a challenge for investors to navigate through a lengthy technical slideshow if titles are unclear or misleading. Avoid using non-standard analytical methods instead of the standard ones (e.g. showing a portion of the Profit & loss statement as opposed to. an entire overview).