A data room is an online storage space that contains key documents used for due diligence prior to the launch of a funding round, M&A deal or other critical business events. It speeds up the process by eliminating duplicated documents, lengthy email threads and outdated versions that were sent out in error. Investors can also access the information they require on a single dashboard that is easy to navigate.
When you’re raising the seed or Series A round, establishing a data room is an ideal method to reduce the amount of work involved in investing and lets entrepreneurs focus on the growth of their business. There are numerous platforms and tools available to host an investor dataroom. It is crucial to select one that offers an intuitive interface both for you and the investors who are reviewing your material.
Some of the most important documents that should be included in a stage 1 investor data room are your business bylaws, articles of incorporation, business certificates and Tax ID numbers. In addition, it’s a good idea to include any market research or competitive analysis that is pertinent to your industry.
Include your most recent pitchdeck in the data room. This will allow investors to quickly reference the numbers and projections that you have shared during your presentation and due-diligence. It is also recommended to include an investor update form to provide investors with a brief overview of how your business is doing.