Due diligence from investors is an important part of funding a startup or completing a merger acquisition transaction. Using virtual data rooms allows investors to read important documents, like financial statements and legal documents without the need for physical meetings and speeding up the process and minimizing the costs associated with document exchanges and security risk.
The exact contents of a data rooms for investors can differ but will typically contain key elements like:
A company description section that describes the company’s values and mission, vision and goals, and the overall strategy for meeting customer and market needs. Based on the kind of venture, this could also include an analysis of competitors or market research.
Financial information, including historical financial performance as well as projected financial performance. This could include reports on profit and loss and balance sheets and performance metrics, audits, tax returns, and more. Information on the cap table, such as ownership structure and distribution of equity.
List of former and current members, with current titles. This is a great opportunity for the team to showcase their knowledge and commitment to the success of the startup.
Referrals and testimonials from customers can be used to strengthen a startup’s story and show the impact of the product or service on the client.
A pitch deck can be used to attract potential investors by highlighting the company’s competitive advantages and market opportunity. This is often the first impression an investor gets of the company and it’s crucial to make sure it’s a good one!