A data room is a vital instrument to conduct due diligence, regardless of whether you are raising Series A funds, or closing an acquisition, merger, or investment deal. It simplifies the collection of documents into one repository, and permits third parties to access the data in real-time, without having to send you emails on a regular basis or request copies of the http://dataroomnote.com/on-premises-vs-off-premises-database-the-difference/ latest version.
While it’s tempting to fill your investor data room with all the information you’ve got at hand make sure not to overwhelm your potential investors. Too many documents can create due diligence a long and difficult process for both parties. A well-organized data room is essential to ensure that investors can quickly and efficiently review the performance of your business, its financial health, operations strategy and legal standing.
Investors will be interested in your startup’s projected and historical financial statements. They will also want to know the source of any assumptions or modeling and the reasoning behind these. You may also include an inventory of prior and current financing agreements and capitalization tables. Entrepreneurs with a compelling pitch that draws VC interested investors often upload their own copy to their data room.
Your investor data room needs to have clearly defined headlines for each slide. If the titles of a technical slide presentation are unclear or inaccurate it could be difficult for investors to read. Avoid using non-standard analyses in place of the standard ones (e.g. showing a small portion of the Profit and Loss statement vs. a full view).