Investors want all the details they can find about your startup, prior to investing their time and money. A Data Room for investors can aid them make a better decision and speed up the process of due diligence for investment. This could be the difference between your startup getting the funding you require and not.
The use of a Data Room for investors is a common procedure for startups seeking to raise capital. Instead of disseminating the complete investor package via email or a Google Drive folder (which can be easy for hackers to gain access) using a Data room for investors gives an organized structure and lets you keep track of access in case there are any issues. There are a myriad of options of software http://vdrdata.com/dealroom-platform-review-fully-automated-investment-management-system available for Data rooms for investors, but one of the most effective options is Caplinked which comes with various features to secure sensitive information as well as simplify the process.
What is included in a data room for investors
While most of the documents on this list are familiar to potential investors from your pitch deck or one-pager but a more comprehensive list could provide more clarity and prevent questions that could arise during due diligence. One of these documents is a detailed description of the team that founded the company and their work experience and experience, which will show that your startup has a strong network to draw upon should they need it.
A legal document that details the company’s structure, organization, and tax information is also crucial. It is also possible to include the cap table which clearly defines who owns how much of the company. It is a good idea to create a mockup, or prototype of the product. This is especially relevant in the beginning in which it can be difficult to demonstrate how the product works or what it could bring.