Due diligence for investors is an crucial to any investment. The more prepared you can be, the quicker your investors will complete their assessment. A data room for investors can make the task a lot simpler for everyone involved.
LPs may want to see various documents, such as legal contracts, agreements with customers and suppliers intellectual property, market research, cap tables, financials and more. Utilizing a virtual data room allows you to share these documents with third parties, and reduces the potential for duplicated emails or outdated copies being delivered in error. These documents can be displayed in a well-organized easy-to-use investor datarooms to demonstrate professionalism and organization.
The investor data room is also an ideal place to save and give your presentation deck (or investor pitch) to a potential investor. While the investor presentation isn’t part of the supplementary due diligence data, many founders incorporate it to give context and facilitate the investor’s access to the information they need.
Some founders use their investor data rooms to store various information for different types investors. For instance certain founders have a «draft» investor data room which they only share with investors who haven’t yet made a commitment and another set of documents for investors who are close to making a commitment. This lets them control the amount of information they share at any given moment and ensures that the correct information is shared with the right people.