Preparing Your Data Room for the Investment Deal Process

Investors need a lot of information in order to complete their due diligence. It is therefore essential to establish your data room as soon as you can when you begin your fundraising efforts. You can accelerate the investment process by including all required documents.

It is also recommended to include a document that has 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 essential to highlight any changes that have occurred since the initial upload of the document. This indicates that you are always aware of the situation and your willingness to be transparent throughout the entire process.

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

Certain founders have other documents, such as resumes of the key members of the team along with employee stock agreements, as well as documentation on hiring. This will help investors get an overview of the team and the company. Additionally some entrepreneurs may also include an analysis of market trends or a growth strategy to demonstrate that the company is positioned to succeed in its business.

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