Preparing Your Data Room for the Investment Deal Process

Investors require lots of information to conduct their due diligence. Therefore, it is essential to establish your data room as quickly as you can after beginning your fundraising efforts. You can accelerate the investment process by including all necessary documents.

It is also recommended to include an index or table of contents for each data room to facilitate navigation. Private equity firms will appreciate documents that are well-written and easy to navigate. It is also important to make note of any changes made since the initial upload of the document. This indicates that you’re on top of things and demonstrates your commitment to provide transparency throughout the entire process.

Investors often request historical or future financial statements. This allows investors to check your numbers’ accuracy and ensure that they are in accordance with your presentation deck. In addition, if you’re providing projected financials, it is recommended to include the assumptions, sources, and reasoning that underlie those projections in your data room.

Some founders include other materials such as resumes of the key members of the team, employee stock agreements and documentation on hiring. This can give investors a a better idea of the company and its employees. Some entrepreneurs also include a market analysis or growth strategy in order to demonstrate how their company is set to be successful.