A http://dataspacelab.net/how-the-legal-industry-scrambles-to-handle-project-management/ data room is a digital platform that lets startups upload important documents to ensure due diligence prior to a funding round or an M&A deal. This could include, for instance the company’s financial forecasts and the company’s detailed IP documentation. The information is then made available to investors who are interested and could aid them in making informed decisions about investing in the startup.
When preparing an investor information room, founders are able to choose to include the following information:
Pitch Decks or Whitepaper Founders are able to upload their pitch decks and a whitepaper that describes the way in which their product or service addresses the complex problem or market in a clear way and is profitable. Adding this document helps to build trust and establish accountability to potential investors.
Projections: Founders can include financial statements from the past and projected. They can also include the assumptions that are based on sources, as well as the reasoning behind these projections. This can simplify the due diligence process, and help investors understand a company’s projected financial performance and growth prospects.
People-Related Documents for Founders: Founders are able to include the resumes of key team members and any stock agreements for employees or other documents related to hiring. Founders can also choose to include their go-to market and growth strategy.
Investor Updates: Through the fundraising and due diligence process, founders are able to include a series of investor updates to the VDR. Investors are kept informed of the development of the business and shows them that the company is dedicated to making the best use of their investment.