When you are involved in startup fundraising, it is important to provide details about your company to investors. It can expedite the process, increase the trust of investors and increase the likelihood of getting a term sheet. The number of documents that you need to provide potential investors may quickly become overwhelming. In this article, we will discuss the best ways to run an investor data room efficiently and effectively.
Create separate rooms for each stage of the investment process. This allows you to segment access to the documents based on investors’ desires. You could, for instance create an easy folder system to organize documents for early-stage investors who have expressed interest in the company, but are not yet ready to invest. This stage contains documents like strategy documents, product plans, and pitch decks.
In the second stage it is possible to include more detailed supplemental data for investors that are moving closer to a decision. This could include a thorough model and forecasts, both historical and projected, legal documentation including customer contracts supplier contracts, intellectual property information and market research.
These documents can give investors a more detailed view of your company and give them the confidence that you are thorough. You can also include previous updates for investors to show the backers that you are serious about transparency and communication. Your investor data space should let you know which documents were accessed, and for duration. This allows you to spot suspicious activity and take the appropriate actions if necessary.
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