A data room is an area that can be used to store confidential documents with a sensitive nature or for privileges in due diligence for M&A transactions. Virtual data rooms are becoming more popular than physical rooms for this purpose. They offer the same level security as traditional methods.

Investors will have the ability to look over the documents in just a few hours, not weeks or months. Startups may find it difficult to determine what information they want to include in their investor data room. There are some guidelines that can be a good place to start.

Investors want to know key information that will help them comprehend your business. This could include your financials along with market research and a clear and concise presentation of your business plan. It’s also important to remember that the business intelligence tools in enterprise organizations amount of information you need to present to an investor will be contingent on the stage that your business is at. An early-stage startup will need to present fewer financials compared to a company in Series A.

Avoid sharing unusual or fragmented analyses since this could make it hard for investors to comprehend the data. It’s also not a good idea to share non-standard charts and graphs except if they add nuance and depth to your presentation. This can be accomplished by focusing on the most important metrics that are easy to understand for investors (e.g., highlighting the number of cohorts that are engaged or retained).