How to Prepare a Data Room for Investor Due Diligence

Due diligence on investors is an essential element of the investment process. Investor due diligence is an opportunity for investors to delve into the financials of the startup and documents, to evaluate the risks and decide if they want to invest. A well-organized data room can help speed up the process, reduce the possibility of miscommunication, or misunderstanding, and boost investor confidence.

This article will highlight a few of the fundamentals that startups must have prepared prior to pitching investors.

Investor Updates

Updates on investor relations can be an excellent way to show investors you are still executing your plan and advancing towards your goals. This is especially important in the beginning. This can also give investors an idea of how you’ve progressed since they last met you and help build trust.

IP Assets

Angels and VCs typically have an interest in a business’s intellectual property, which could be a significant component of its value. Showcase your IP by including trademarks, patents, and other pertinent data points even if they’re directly related to the product you’re working on.

Cap Table

A https://dataroomnote.com/data-room-cost-and-its-relevance-with-service clear cap-table shows potential investors the percentage of ownership you own, and how it’s broken down. It’s an excellent idea to include your articles of association, which provide legal context around the structure of your business.