A data room is an online repository that contains key documents used for due diligence prior to the funding round, M&A deal or other business-critical events. It simplifies the process by eliminating duplicated documents, lengthy email threads, and obsolete versions that were sent out in error. Investors have access to all the information they require using a simple dashboard.
If you’re looking to raise a seed or Series A round, setting up an investor data room is a great practice that helps reduce the hassle of investing and allows entrepreneurs to focus on building their businesses. There are a myriad of platforms and tools that allow you to host an investor dataroom. But, it’s important to select a platform that offers an intuitive interface for both you as well as the investors who will be reviewing your materials.
The most important documents that should be included in a stage 1 investor data room are your company’s bylaws, articles of organization, business certificates and Tax ID numbers. Also, it’s an excellent idea to include any market research and competitive analysis that’s relevant to your industry.
Be sure to include your most recent pitch deck in the data room. This will allow investors to quickly reference the numbers and projections you have shared with them during your presentation and due diligence. It is also on premises vs off premises database possible to include a brief update to investors to provide investors with a brief overview of your company’s progress.