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What is an Investor Data Room and What Should You Include in One?

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A data room is the solution. It’s a safe space where a startup can keep important documents related to due diligence and manage who can access them. A data room could be a custom-built software that enables granular permissions and expiring links. Or it can be something as simple as a shared Google Drive folder.

Investors are interested in your company, and they want to learn more about the team as well as your business model, your traction and your financials. A data room for investors can aid in the process and assist you in close a deal quicker. What is an investor dataroom? What should it contain?

For years, if an enterprise wanted to acquire a business, the acquiring company would require access to historical and financial documents for the company. Those documents were typically stored in a room, and people crucial to decision-making would visit the room to read them. Today, investors are doing much of the same thing to determine whether or not they should invest in a business, and they need access to the same types of documents.

The best investor data rooms are designed in a way that makes it easy for investors to navigate and understand the information. You will also want to ensure that the information you provide is pertinent and that the information doesn’t contradict itself. A well-organized data room ready to go when you begin your first fundraising discussion will also make the process run more smoothly.

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