Due diligence by investors is an an important part of any investment. The more prepared you are, the faster your investors will be able to finish their review. A data room for investors will make the task easier for all parties.
LPs will want to see many different documents like legal contracts, supplier and customer agreements and intellectual property documents market research, cap table, financials, and many more. With the virtual dataroom, it is easy to share files with third-party companies. This means that you can avoid sending duplicate copies or outdated copies. The ability to share these documents in a structured and easily navigable investor data room also helps to demonstrate your organization and professionalism.
The investor data room is the perfect place to save and give your presentation deck (or investor pitch) to a potential investor. The investor presentation isn’t solely a part of the due diligence supplementary, but many founders include it to give context and allow investors to access the information they need.
Some founders also make use of their investor information room to store various sets of information for different kinds of investors. For instance some founders have a “draft” investor data room where they only share with investors who haven’t yet signed commitments, and a second set of documents for investors who are in the process of concluding a deal. This allows them to limit the amount of information they share at any given moment and ensures that the appropriate information is distributed to the right people.