A data room is an area where you can provide sensitive information about your company with potential investors, or acquirers, as part of a funding round or M&A transaction. These rooms were once physically located but they are now nearly always online. It is crucial to ensure that your investor data space has an easy-to-use navigation system for users and is prepared to provide documents for https://freshboardroom.com/virtual-data-rooms-and-due-diligence-the-perfect-pair-for-mergers-and-acquisitions each stage of due diligence. You should also keep track of the usage of your data room so that you know the documents that have been read and when. If needed you can cancel access.
Generally, investors would like to validate the information you have shared in your pitch deck, and they also want to get more specific on your business model, traction and financials. The investor data room is an essential element of fundraising for your business, so it is imperative to be well prepared for due diligence.
To speed up the process, prepare documents that are more likely to be requested such as your cap table (breaking down ownership percentages) legal documents, and a complete list of all investments made in your business. This will help you answer the most commonly asked questions and give you an edge in the decision-making stage.
It is ideal to include documents about your team, including employee handbooks, contracts of employment and plans for future hiring. Additionally you should be prepared to share an example of your product especially if you’re in the pre-seed stage of your venture.