A data room for investors is an online repository of important documents that are used for due diligence prior an investment round, M&A transaction or other important business event. It simplifies the entire process by removing duplicate documents, lengthy emails threads, and outdated versions that were sent in error. Investors have access to all the information they require through an easy-to-navigate dashboard.
It doesn’t matter if you are raising Series A or Seed capital, establishing an investment data room is a smart idea that lets entrepreneurs focus more on the development of their business. There are a variety of platforms and tools that allow you to host an investor dataroom. It is important to select a platform that provides a user-friendly interface for both you and those who will be looking over your materials.
Some of the most important documents you should include in a stage 1 investor data room are your business bylaws, articles of incorporation, business certificates and Tax ID numbers. Additionally, it is a good idea to include any market research and competitive analysis that is relevant to your business.
Most importantly, be sure to include your most recent presentation deck in the data room. This will allow investors to quickly reference the numbers and projections that you have presented during your presentation as well as due diligence. It is also recommended to include an investor update form to give investors a snapshot of how your company is performing.