Preparing Your Data Room for the Investment Deal Process

Investors require a large amount of data to conduct their due diligence. This is why it is vital to prepare your data room as soon as you begin your fundraising efforts. You can speed up the investment deal process by preparing all necessary documents.

It is also recommended to include an index or table of contents for each section of the data room to assist in navigation. Private equity firms will appreciate well-prepared documents that are easy to navigate. In addition, it is essential to highlight any changes to information since the initial upload of a specific document. This shows that you are always aware of the situation and also your willingness to be transparent throughout the entire process.

Incorporating historical and/or projected financial statements is among the most frequently requested requests from investors. This will allow investors to check the accuracy of your numbers and ensure they are in the same fashion as your presentation deck. It is also a good idea to include in the data room the assumptions, sources, and reasoning behind your projected financials.

Certain founders have other documents including resumes of key members of the team along with employee stock agreements, as well as documents regarding hiring. This can help investors get a better idea of the team and the business. Some entrepreneurs may also include a market analysis or growth strategy to demonstrate how their company is set to be successful.