A data room online for investors is a digital platform where startups upload important documents related to due diligence prior to funding round or an M&A transaction. This includes, for example the company’s financial projections and comprehensive IP documentation. The information is then accessible to potential investors and can assist them in making an informed decision about investing in the startup.
Founders may include the following information when creating a data room for investors:
Pitch Decks or Whitepaper Founders may upload their pitch decks as well as a whitepaper that describes the way their product or service solves complex problems or markets in a clear manner and is profitable. This document will help build trust with potential investors and demonstrate accountability.
Projections: Founders can include financial statements from the past and projected. They could also provide the assumptions as well as the sources and reasoning behind these projections. This can help simplify the due diligence process, and help investors comprehend the projected financial performance of a company and growth potential.
People-Related documents: Founders may include resumes of the team’s key players as well as any documents for hiring. Founders can also include their go to market and growth strategy.
Investor Updates: Throughout the fundraising process and due diligence process, founders may add a series updates to the VDR. This keeps investors informed about the development of the business and lets them know that the company is committed to making the best use of their money.