Using an Investor Data Room to Facilitate Investor Due Diligence

Due diligence of investors is a crucial part of any investment process. The more prepared you will be, the quicker your investors will finish their reviews. An investor data room will make the task easier for all parties.

LPs will require many different documents like legal contracts, supplier and customer agreements, intellectual property information, market research, cap table financials, and much more. By using the virtual dataroom, it is easy to share files with third parties. This makes it impossible to send outdated or duplicate copies. These documents can be exhibited in a well-organized, easily navigable investor datarooms to show professionalism and organization.

The investor data room is also an ideal place to save and present 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 to give context and facilitate the investor’s access to information they require.

Some founders also choose to make use of their investor data room to store different sets of information for different types of investors. For instance certain founders have a “draft” investor data room that they share with investors who haven’t yet made an agreement, and a different set of documents for investors who are in the process of making a commitment. This lets them determine the amount of information they share and ensures that the right information is reaching the right people.

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