How to Run an Investor Data Room

A VC or an investor has expressed interest in your venture and requested more data. They want to validate what you’ve put in your pitch deck and are looking for more detailed information about your business model, traction and financials. An investor data room can assist.

Making the right choices can mean the difference between investing in a profitable or losing venture. Investors are busy and don’t have the time to waste on slow processes, so you need to be ready the moment an interested investor comes in. Having the right information in the virtual data room will help both parties save time, and shows you’re committed to fundraising.

To run an investor data room efficiently, start by establishing an organized folder structure that includes clearly labeled subfolders. Only include the documents that investors require to complete their due diligence. This may differ in each stage of the deal process, but typically includes the following:

IP Information (patent filings, trademarks and intellectual property)

Documentation related to people (resumes and employee stock pop over here agreements as well as documents on hiring).

Financial Information (historical & projected) including assumptions and sources, and the rationale behind these projections

Consider adding documentation to prove that your company is in compliance with national, local and international regulations. This is an excellent way to put investor’s minds at rest early and make them feel secure that the business is operating legally. Not to mention, include files on sustainability over the long run (e.g. carbon emission reporting system or other measures of environmental sustainability). Using a virtual data room with access analytics for files can allow startups to actively prepare ahead of meetings with investor stakeholders. This will lead to better conversations and a better understanding of the issues investors are most concerned about.