The investor data room serves as the central repository of all materials related to due diligence, ensuring everything is in one place. It can also speed up the process, and give both parties peace of peace of. It’s a must for any startup who wants to raise funds from investors or buyers outside the company, but many founders doubt whether it’s worth all the work and expense.
The answer to this is usually yes, however it is contingent on the amount of information provided and how well it’s presented. Investors want all the information they need to make an informed decision. However providing too many details or data that isn’t relevant can occupy their time and decrease the impact of crucial information.
As an entrepreneur you will need to consider the order in which you include in your investor data room. Only share details that are essential to the due diligence procedure. You should also think about the type of investor you’re targeting and adapt the content accordingly.
For example, you might have a section dedicated to industry reports and publications such as customer testimonials and references and a competitive analysis. You should also include a section for the legal aspect with documents such as articles of incorporation, corporate bylaws and other documents relating to the structure and governance of the company.
It is also important to include information on the intellectual property your company owns (patents and trademarks). This is one of the top criteria that angels and VCs evaluate when making their investment decisions. This information will help speed up the process and ensure that investors are aware of the risks involved with their investment.