Preparing Your Data Room for the Investment Deal Process

Investors require a large amount of data to conduct their due diligence. It is therefore important to establish your data room as soon as you can once you begin your fundraising efforts. By incorporating all the required documents, you can accelerate your investment deal process.

To facilitate navigation It is recommended that the document includes an index of contents or table of contents for each section in the data room. Private equity firms will value the quality of documentation that is easy to navigate. In addition, it is essential to highlight any changes to information since the initial upload of a specific document. This indicates that you’re on top of things and demonstrates your commitment to keep things in order throughout the entire process.

Investors often request historical and/or future financial statements. This allows investors to check your numbers’ accuracy and ensure that they are in the same fashion as your presentation deck. It is also recommended 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 choose to include other information such as the resumes of key team members as well as employee stock agreements and even the documentation for hiring. This will help investors get an understanding of the company and its team. Additionally some entrepreneurs may also include a market analysis or growth strategy to show how the company is set to be successful in its field.