An online data room for investors is a digital platform where startups upload important documents that are relevant to due diligence before a funding investing in a private equity fund round or M&A transaction. This could include, for example, the company’s financial forecasts as well as detailed IP documentation. This information is made available to potential investors and can aid them in making informed decisions regarding investing in the startup.
When creating an investor data room, founders are able to choose to include the following details:
Pitch Decks or Whitepaper Founders can upload their pitch decks as well as whitepapers that explain the way in which their product or service addresses complex problems or markets in a clear manner and is profitable. This document can help build trust with potential investors and prove their accountability.
Projections: Founders are able to include both historical and projected financial statements, as well as the assumptions, sources and reasoning behind the projections. This can make it easier to complete the due diligence process, and help investors comprehend the company’s projected financial performance and growth prospects.
People-Related Documents for Founders: Founders are able to include the resumes of the team members who are key to their success and any stock agreements for employees or other documents regarding hiring. The founders can also include their go-to-market and growth strategy.
Investor Updates During the fundraising process and due diligence process, founders are able to add a series updates for investors to the VDR. Investors are kept informed of the development of the business and lets them know that the company is dedicated to making the best use of their money.