VCs often look for more than a short pitch deck and teaser that startups believe is all they need to obtain funding. Investors want to know more about the company, including its development and history in addition to verifying the information they were provided at the beginning of their meeting. An investor data room is a central location for all documents and other information that must be shared with prospective clients to ensure due diligence.
Startups can utilize virtual deal rooms to communicate and manage their documents related to the process of fundraising, and due diligence with investors. File access analytics allow them to monitor activity and identify who has accessed what when, and for how long. This gives them the insight they need to tailor conversations and provide a more informed service to investors.
Some of the key documents that should be included in an investor data room include historical and projected financials (with assumptions and sources, as well as the reasoning behind projections) as well as the cap table. In-depth information about the growth trajectory of the business and its competition landscape is a excellent idea, as well as the specifics of any acceleration clauses made to shareholders already in the company. Finally, a list of the IP assets the company has should be included.
This information is a great way to show investors that you’re aware of the current situation and are able to answer their questions. This will also simplify the due diligence process because you can present all information to investors in one location.