A data room is an online database that contains key documents used to conduct due diligence prior the launch of a funding round, M&A deal or other critical business events. It streamlines the entire process by eliminating duplicate files, lengthy email threads, as well as outdated versions that were sent in error. Investors can access all the information they require through an easy-to-navigate dashboard.
If you are raising a seed or Series A round, creating a data room is a good method to reduce the stress of investing and lets entrepreneurs focus on the growth of their business. There are many tools and platforms that can be used to host an investor dataroom. It is important to choose one with an intuitive interface for both the investor and the investors who are reviewing your material.
Included in the stage one investor data room should be the company’s bylaws and articles of incorporation. Also include business certificates, tax ID numbers, and any other relevant documents. Include any market research or competitive analysis that are relevant to your business.
Include your most recent pitchdeck in the data room. This will enable investors to quickly refer back to the numbers and projections that you have shared during your presentation as well as due diligence. It is also advisable to include a short investor update document to provide investors with a quick overview of how your business is progressing.