How to Prepare a Data Room for Investor Due Diligence

Due diligence on investors is a crucial step in the investing process. Investors have the chance to dig into the company’s finances and documents as they evaluate risk and decide whether or not to invest in the company. A well-organized data room can facilitate the process, reduce the possibility of miscommunication, or confusion, and boost investors’ confidence.

This article will outline a few of the essentials startups must have prepared before pitching to investors.

Investor Updates

Investor updates can be an excellent tool to show investors you are still executing your plan and advancing towards your goals. This is especially important in the beginning. This will also give them a sense of how far you’ve come since last time they saw you and can help to build confidence.

IP Assets

Angels and Venture Capitalists are usually interested in the intellectual property of a business which could play an important impact on its value. Make sure you showcase your IP by including trademarks, patent filings, and any other relevant information even if they’re directly connected data room cost and its relevance with service to the product you’re working on.

Cap Table

A clear cap table reveals to potential investors how much ownership you have and how it’s broken into pieces. It’s an excellent idea to include your articles of association, which will provide legal background to the structure of your business.