Investors want to learn everything they can about your company before they commit their money and time to it. A Data Room for investors can aid them make a better choice and will speed up the process of due diligence for investment. This can mean the difference between obtaining the capital you need to start your business and not.
A Data room is a well-known method used by startups seeking funding. Instead of disseminating the complete investor package via email or a Google Drive folder (which can be a simple target for hackers to gain access) using a Data room for investors gives you a more structured structure and allows you to monitor access in the event of any problems. There are a myriad of alternatives to software that can be used for Investors’ Data Rooms however one of the best options is Caplinked, which offers several features to secure sensitive information and simplify the process.
What Happens in a Data Room for Investors
While most of the documents in this list will be familiar to your prospective investor from your pitch deck or one pager A comprehensive list of documents can give more clarity and anticipate questions that might arise during due diligence. These documents provide a thorough breakdown on the founding team’s experiences. This will show that you have a vast network of people you can make contact with in case of need.
Other important aspects include a legal section that details the organization of the company, its formation and tax information. You can also include a cap table that clearly defines who owns how much of the company. It is also a good idea to create a prototype or mockup of the product especially at the beginning of the process when it may be difficult to demonstrate how the product functions or its potential http://vdrdata.com/the-difference-between-investment-banking-vs-brokerage/ value add.