Using an Investor Data Room to Facilitate Investor Due Diligence

October, 25 2023

virtual data rooms and how progressive they are

Due diligence of investors is a vital part of any investment process. The more prepared you will be, the faster your investors will complete their review. An investor data room can make the job easier for all parties.

LPs may want to see the full range of documents, including legal contracts agreements with customers and suppliers intellectual property, market research, cap tables financials, cap tables and more. Utilizing a virtual data room makes it easy to share these files with third-party parties and eliminates the possibility of duplicate emails or obsolete copies being misdirected. These documents can be presented in a well-organized, easily navigable investor datarooms that demonstrate professionalism and organization.

The investor data room is also the perfect place to store and display your presentation deck (or investor pitch) for potential investors. Although the investor presentation isn’t a mandatory part of the due diligence supplementary data, many founders include it as a way to provide context and ease the investor’s access to details they require.

Some founders utilize their investor data rooms to keep different information for different types of investors. Certain founders, for instance have a “draft” or investor data room they only share with investors that have not yet committed and another set of documents to those who are preparing to sign a deal. This lets them limit the amount of information they share and ensures the proper information is getting to the appropriate people.

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