An online data room for investors is a digital platform that lets startups upload crucial documents related to due diligence prior to funding round or M&A transaction. This usually includes the company’s financial projections, as well as detailed IP ownership documents. The information is then available to potential investors and can aid them in making informed choices regarding investing in the start-up.

When preparing an investor data room, founders can choose to include the following details:

Pitch Decks or Whitepapers: Founders can upload their pitch decks and whitepapers that explain how their product or service can solve complex problems/markets in a clear and profitable way. Adding this document will help build trust and establish that they are accountable to investors.

Projections: Founders should include both historical and projected financial statements. They should also include the assumptions, sources and reasoning behind the projections. This will simplify the due diligence process and help investors comprehend the company’s financial forecasts and growth prospects.

People-Related Documents: Founders may include resumes of key team players as well as any employee stock agreement or documentation related to hiring. Founders can also choose to include their go-to market and growth strategy.

Investor Updates During the fundraising and due diligence process, founders are able to include a series of updates for investors to the VDR. This helps to keep investors up to date on the progress of the business and allows them to see that the company is dedicated to making the most of its investment.

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