A VC or investor has expressed an interest in your venture and wants to see more data. They want to validate what you’ve shared in your pitch deck and are looking for more specific information about your business model, the traction of your company and financials. A data room for investors could aid.
Making the right choices can mean the difference between investing in a profitable or losing venture. Investors are busy and don’t have the time to wait for slow processes, therefore you must be ready https://dataroomproducts.com/how-to-run-an-investor-data-room-for-your-startup/ to go whenever an interested investor comes in. Making the proper information available in the virtual data room will save both sides time and show that you’re serious about fundraising.
To run an investor data room effectively, you should start by establishing an organized folder structure that includes clearly labeled subfolders. Include only the documents investors will need to complete their due diligence. This will be different at every stage of the deal flow, but typically includes the following:
IP Information (patent filings and trademarks)
People-Related Documentation (resumes and employee stock agreements and documentation on hiring)
Financial Information (historical & projected) that includes sources and assumptions, as well as the rationale behind these projections
You might also consider adding documents that show your startup is compliant with local, national or international regulations. This is a great way to set investors’ minds at ease early and make them feel secure that the business is operating legally. Lastly, consider including files that address sustainability in the long run (e.g. carbon emissions reporting system or other measures to sustain the environment). A virtual data room which incorporates file access analytics can enable startups to prepare for the possibility of meetings with investor stakeholders. This will lead to better conversations and a greater comprehension of the questions investors are most interested in.
