Preparing Your Data Room for the Investment Deal Process

Investors require a great deal of information in order to do their due diligence. This is why it’s vital to prepare your data room immediately you begin fundraising. By including all of the required documents, you will accelerate your investment deal process.

It is also recommended to include a document that has an index or table of contents for each data room to assist in navigation. Private equity firms will appreciate a well-crafted documents that are easy to navigate. It is also crucial to note any changes made after the initial upload of the document. This will show that you’re on top of things and demonstrates your commitment to be transparent throughout the entire process.

Investors are often asked to provide historical and/or future financial statements. This will allow investors to verify the accuracy of your numbers and ensure that they are in line with your pitch deck. It’s also an excellent idea to include in your data room the assumptions as well as the sources and reasoning that you have used to justify your financial projections.

Some founders prefer to include other information such as the resumes of key team members, employee stock agreements, and other documents regarding hiring. This gives investors a better sense of who the company is and the strength of its staff. Additionally some entrepreneurs may include an analysis of their market or growth strategy to show how the company is set to be successful in its sector.