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How to Prepare an Online Data Room for Investors

An online data room for investors is a platform where startups upload critical documents related to due diligence prior to a financing round or an M&A transaction. It typically, this is the company’s financial projections and extensive IP ownership documentation. The information is then available to investors who are interested and could help them make informed decisions regarding investing in the startup.

When preparing an investor data room, founders are able to choose to include the following information:

Pitch Decks or Whitepaper Founders are able to upload their pitch decks as well as a whitepaper that describes the way their product or service solves a complex problem/market clearly and is profitable. This document can be used to establish trust with investors and prove their accountability.

Projections: Founders should include both historical and projected financial statements, including the assumptions, sources and logic behind the projections. This can simplify the due diligence process and help investors useful reference comprehend the company’s financial forecasts and growth potential.

People-Related Documents: Founders may include resumes of the team members who are key to their success and any employee stock agreements or other documentation in connection with hiring. Founders may include their growth plan and go-to-market plan.

Investor Updates During the fundraising process and due-diligence process, the founders could add a series investor updates to the VDR. This helps keep investors updated on the business’s progress and allows them to know that the company is dedicated to getting the most value from the investment.

April 30, 2024

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