How to Create a Data Room for Investors
A data room is a secure space that allows multiple users to access and browse the same documents. It is used for due diligence in mergers or acquisitions, fundraising, as well as corporate restructuring. There are many cloud services which offer data room storage, such as Quoroom, iDeals, DataSend or Docsend for instance It is essential to do your research prior choosing one. Ensure the provider you choose offers templates, ways to organize files and sort them with ease, customized analytics, watermarking downloaded documents, as well as offering a secure online environment.
When creating an investor dataroom the founders must think about the kinds of information investors are looking for. It is generally suggested to include the following sections:
Documents of Company Organization/Formation This includes the company’s bylaws, articles of incorporation, business certificates, tax information and any other documentation an investor might need to validate the legitimacy of a start-up.
Financial Information: Included are the projected and historical financials, as well as the assumptions and sources used to build the projections. Founders may also want to include a pitch deck or whitepaper in this section.
Founders may add an “Other”, which contains any other information investors may require, including intellectual property stacks, technology stacks, and more information about the company. An organized and thorough investor data rooms will help investors feel more confident that there aren’t any unintentional surprises or unanswered questions, which can lead to quicker deals and more valuable valuations.