Due diligence by investors is vital to any investment. The more prepared you are, the quicker your investors can finish their assessment. A data room for investors can make the job a lot easier for everyone involved.
LPs might require a wide range of documents, such as legal contracts agreements with customers and suppliers intellectual property, market research as well as cap tables financials, and many more. With the virtual dataroom, it is easy to share files with third parties. This eliminates the possibility of sending duplicate copies or old versions. The ability to share these documents in a well-organized and easily accessed investor data rooms can also help to demonstrate your organization and professionalism.
The investor data room is the perfect place to store and present your presentation deck (or investor pitch) to a potential investor. While the investor presentation isn’t a mandatory part of the supplementary due diligence data, many founders include it as a way to give context and facilitate investors’ access to information they need.
Some founders also use their investor data rooms as a storage space for various types of information for different types of investors. For example some founders have a “draft” investor data room that they only share with investors who haven’t yet made commitments, and a second set of documents for investors who are near to making a commitment. This allows them to control the amount of information they disclose at any given point and ensures that the correct information is shared with the appropriate people.