https://dataroomproducts.com/what-is-due-diligence/
In the process of fundraising for startups, it is essential to disclose information about your company to investors. It can help speed up the process, build confidence and increase the chances of getting a term sheet. The number of documents you need to provide potential investors could quickly become overwhelming. In this article, we will discuss how to run a data room for investors efficiently.
Create separate rooms for each stage of the investment process. This allows you to segment access to documents based on investor preferences. You can, for example create an easy folder system to organize data for early-stage investor who have expressed interest in the business but are not yet ready to invest. This stage typically contains documents pertaining to strategy, pitch decks and product plans.
In the next stage you can add more detailed information for investors that are moving closer to a decision. This could include a complete financial model and forecasts (both forecasts and historical) and legal documentation, customer and supplier contracts intellectual property information, and market research.
These documents can provide investors with a an in-depth view of your company, and provide them with the assurance that you’re meticulous. You could also include previous investor updates to show backers that you care about transparency and communication. In addition, your investor data room should permit you to keep track of who has visited which documents and for the duration of. This lets you spot any suspicious activities and take appropriate actions if needed.