Data room fundraising is the process of attracting investment money from potential investors by using a virtual dataroom platform. The platform enables access to secure and safe documents with a pre-defined list of individuals (e.g. prospective LPs). The use of the data room offers greater security over email, so there is less risk of your financial plan or business plan ending up in the wrong hands. You can limit who can access the documents. You can restrict those who are allowed to access, download, or print them.
Investor data rooms are a vital tool for startups in raising capital. The platform allows founders to streamline due diligence processes and to communicate effectively with investors. Being able to access all relevant information one place reduces time, eliminates the back and forth that usually occur via email and phone calls and increases the efficiency of the entire fundraising process.
What should I include in my Investor Data Room?
It is important that startups have a full set of the pertinent documents for the stage of development. This could include a current presentation deck, the basic financials, including cash metrics, a projection of the year and your captable, in addition to any recent information regarding milestones that have been achieved or commitments made during the current round.
It is also crucial to include the details of your intellectual property (IP). Making sure you have a solid IP portfolio is an excellent method to attract investors, therefore, make sure to include your patent numbers, filed applications and trademarks. Also, you should include qualitative details about your business like retention and engagement numbers (but do not pick and choose! ).