A data room is a digital storage space for startups, which provides easy access to a library of communication tools and documents. It’s a controlled and secure method to store and manage information. They’re traditionally used for M&A or due diligence processes, but they are also able to assist founders of startups in documenting aspects of their business that could not be recorded on paper, and also improve the overall efficiency of their company. Virtual data rooms can also be used by startups to impress and connect with potential investors.
Include the right information in your investor’s data space to speed due diligence and increase the chances of getting an investor term sheet. As a startup, it is in your best interest to provide as much information as possible. This will help build confidence and allow investors to evaluate their options.
Your investor data room should include your business plan as well as financial forecasts, an analysis of market research (preferably with statistics for your industry) as well as a competitor analysis, and a complete competitive environment. You should also provide customer references and referrals in this section.
In addition to this, you should include your articles of incorporation, business certificates, Tax ID numbers and other relevant documents in the company organisation/formation section. Finally, you must share an index/table of content document that contains links to the various sections of your investor information room to make it easier to navigate. Include any other documents that the investor might require as part of due diligence.