What should be included in an Investor Data Room?

What should be included in an Investor Data Room?

An investor data room is a tool used to improve how you present your company to internal and external partners. When dealing with investors, you must present your company as accurately and as you can and in the most compelling manner possible. Investors will gauge the value of investing in your company by how you present the documents that measure your brand’s strengths and performance. An investor data room is the best platform to share sensitive data between parties securely. Here is what you should include in an investor data room.

investor data room

  1. Business Documents. Since the primary reason to have an investor data room is to share documents securely, you will start by adding essential documents. Include documents such as;
    •         Legal structure and articles of incorporation
    •         Records of previous capital raise and liquidity events
    •         Board of Directors’ meeting minutes or previous actions
    •         Business plans
    •         Company financials, including profit and loss statements and projections
    •         tax returns, audits, financial evaluations
    •         Marketing plans, strategies, and assets

    While these documents are essential when closing a deal, remember that you should not include every business document in your data room. This is because additional documents require more time to review, irrelevant documents can be distracting, and several documents increase the risk of potential compromise.

  1. Past Investor Updates. This will help your investor assess the growth of your company. Past investor updates also show that you take investor communication and transparency seriously. These updates should share the bad as much as the good.
  1. Market Research. This section shows your potential investors that you have a deep understanding of your market and competitors. Include any public reports that are relevant to your industry. Also, share a competitive analysis showcasing different price points and feature differences. Include a list of companies you are tracking, some of which are not in the market yet. This shows your potential investor that you are thorough in your marketing research.

investor data room

  1. Team Members. Include a section highlighting your team members, including their titles, salaries, and job description. You can also take advantage of this section to showcase where your next hires will be. This will help you share a vision of the team you are building, and investors can also jump in and help you hire. You can also include documents like onboarding to provide a view of your culture and hiring process.
  1. Personalized Views. Create a base structure that includes all documents, but adds different views and access rights for the individuals evaluating your documents. This way, you will tailor unique content to each person. For instance, your investor’s legal team may not need to see some sales and marketing documents.
  1. Tracking Measures. Your data room should offer a single view of who has access to what documents, at what time, and for how long. This feature will allow you to monitor unusual activities like attempts to print or share. You may also note that no one has accessed some files, and you can ask why or consider not to include that document in future investor data rooms. You will only find such features from the best data room providers.

These are the basics of what to include in your investor data rooms. However, always remember that different investors may require to see various documents.

 

 

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