Due diligence by investors is an essential part of any investment process. The more prepared you can be, the quicker your investors will complete their due diligence. A data room for investors will make the task easier for all parties.
LPs may require various documents, such as legal contracts agreements with suppliers and customers, intellectual property, market research, cap tables, financials and more. Using a virtual data room makes it easier to share these documents with third-party parties and eliminates the possibility of sending duplicate emails or outdated www.dataroomsource.com/why-does-a-startup-need-an-investor-data-room/ copies being sent in error. These documents can be presented in a well-organized easy-to-use investor dataroom to demonstrate professionalism and organization.
The investor data room can also be used to store and share an investor pitch with a prospective investor. The investor presentation is not strictly part of due diligence supplementary however, many founders incorporate it to provide the context and make it easier for investors to get the information they require.
Some founders use their investor data rooms to save different information for different investors. For instance, some founders have a “draft” and investor data room that they only provide to investors who have not yet committed, and another set of documents to those who are about sign a deal. This lets them restrict the amount of information they share and ensures that the right information is reaching the appropriate people.
