An investor data room is a virtual repository to store documents that will be used during due diligence. It is a necessary device for startups seeking to get investors interested and complete the investment process as swiftly as possible.
In addition to reducing due diligence timelines, an investor data room can enhance the quality of decisions made by all parties. Its advanced features include live updates, document versioning control and granular sharing rights. This ensures that all parties are working with the most current version of the data. The platform also allows users to connect with one another using private and group messaging, Q&A modules and task assignment capabilities which streamline collaboration throughout the process.
While some founders of startups may consider that an investor room is an unnecessary and costly, additional step, you should keep in mind that it’s essential to getting financing for your company. Investors will be interested in the information that supports the financial projections and statements that you have included in your pitch deck. The investor data room lets you do this, and to answer questions they may not have asked during your pitch deck.
In addition to putting your pitch deck in the investor data room, you will be required to add a variety of additional documents for due diligence. These documents should include legal documents like contract with suppliers and customers, as well as intellectual property information. They may also include market research and other financial data. It is also necessary to submit a full business plan and financial model that includes historical and projected financials.