What Documents Should Be Saved in an Investor Data Room?
A virtual data room (VDR) is an online repository that allows sharing of sensitive documents and files. Startups who seek funding can submit confidential revenue projections, complete financial records, as well as IP ownership documents into an investor data room which allows investors to perform due diligence quickly and make educated investment decisions.
Startups require a data space for investors to help them simplify the due diligence process and organize the information. This solution helps to reduce communication time and speed up the decision-making process in a transaction.
What documents should be archived in an investor data room?
Whatever the industry, startup documents typically kept in an investor’s data room include capitalization tables, term sheets, and previous funding information. The data room can also contain technical documents such as system architectures, integrations, or documentation for existing products. Investors will also want to review intellectual property documents such as trademarks, patents and filings.
Founders should think about setting up an investor data room as early as possible even before launching an investment round. Thus, the startup will be able to keep all its historical data in one place and share it with investors during due diligence without having to recreate the presentation. The VDR should also include insightful statistics, like audit trails and her response activity tracking in order that the startup can monitor the documents that are being viewed by whom.
