Preparing Your Data Room for the Investment Deal Process

Preparing Your Data Room for the Investment Deal Process

Investors require a lot of information in order to complete their due diligence. This is why it is essential to create your data room immediately you begin fundraising. You can speed up the investment deal process by including all required documents.

To facilitate navigation to navigate, it is recommended that the document includes an index of contents or table of content for each section within the data room. Private equity firms will appreciate the quality of documentation that is easy to navigate. It is also important to note any changes made since the original upload of a document. This will show that you are always on top of the current situation and your willingness to be transparent throughout the entire process.

Investors often request historical and/or future financial statements. This will allow investors to check the accuracy of your numbers and ensure that they are in conformity with your pitch deck. It’s also beneficial to include in the data room the assumptions of the source, reasoning, and assumptions that you have used to justify your financial projections.

Some founders decide to include other information such as the resumes of the key team members, employee stock agreements, and documents on hiring. This can give investors a a better idea of the company and its employees. Some entrepreneurs will also include a market study or growth strategy to show how their company is poised for success.

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