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How to Run a Detailed Investor Data Room
Investors require a lot information to make an informed decision when investing in your startup. The more information they have, the faster they can look over it and reach the right decision. This is the reason you need to ensure your data room is filled with the most important documents prior to starting conversations with investors (or at a minimum, as early as possible).
In addition to the key investment documents you’ll need for any due diligence, founders should include their most recent investor presentation, basic financials for past performance and projections, cap table, and company organization/formation documentation (including business certificates, articles of incorporation, tax information, etc.). These documents should be readily available in the investor’s data room to allow investors to quickly and effectively create a memo or have conversations with their partners, which could lead to an offer.
Another useful document to include in your investor data room is an analysis of deal attribution that will show how your team has been investing in other companies, helping to convince potential LPs that you’re capable of making the right investments. You may also want to include other supplementary information, including intellectual property information, customer and supplier contracts, market research, and more.
While you can add additional documents to your investor data room at any point however, you should only allow access when the investor is committed to moving toward a term sheet. It may delay the process if you allow an investor to access your data room before he’s prepared. They may even decide not to invest.