Preparing Your Data Room for the Investment Deal Process

Investors require lots of data to conduct their due diligence. It is therefore essential to set up your data room as fast as you can once you begin your fundraising efforts. You can accelerate the investment process by incorporating all the necessary documents.

It is also recommended to include a document that has an index or table of contents for each data room in order to aid navigation. Private equity firms will appreciate a well-crafted documents that are easy to navigate. It is also important to highlight any changes made after the initial upload of the document. This will show that you are always on top of the current situation and your willingness to be transparent throughout the entire process.

Investors frequently request historical and/or future financial statements. This will enable them to verify the accuracy of your numbers and also ensure that they are aligned with your pitch deck. In addition, if providing projected financial projections, it is a best practice to include the assumptions, sources, and reasoning behind the projections in the data room.

Some founders prefer to include other documents such as resumes of key team members and employee stock agreements and documentation on hiring. This can give investors a better idea of who the company is and the strengths of its team. Some entrepreneurs will also include a market study or growth strategy to demonstrate how their organization is set to be successful.

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