A data room is an essential tool for conducting due diligence, whether you are raising Series A http://dataroomnote.com/what-factors-make-one-data-room-better-than-the-other/ financing or closing an acquisition, merger or investment deal. It lets you organize all of your documents in one place and let third-party users access the information at any time without the need to email or request updated copies.
It’s tempting but you don’t want to overwhelm your investors. A lot of documents can make due diligence a long and difficult process for both parties. A well-organized and organized data room is crucial to ensuring that investors are able to quickly and easily review your business’s performance, operations strategy, financial health and legal status.
Investors will be interested in your company’s projected and historical financial statements. They’ll also be interested in knowing the source of any assumptions or models, as well as the rationale behind the assumptions or models. You may also include a list of previous financing agreements, capitalization tables and other details. Entrepreneurs who have a compelling pitch that draws VC interest usually put a copy of their pitch in their data room.
Your investor’s data room must have clearly defined headlines on each slide. If the titles of a technical slide display are unclear or confusing they can be difficult for investors to navigate. Avoid using non-standard analysis in lieu of conventional ones (e.g. showing a portion of a Profit & loss statement, versus a full-length one).