How to Prepare a Data Room for Investor Due Diligence

Due diligence by investors is a crucial part of the investment process. Due diligence for investors is an opportunity for investors to dig into the company’s financials and documents, to evaluate the risk and determine if they are willing to invest. A well-organized and organized data room can speed up the process, lessen the likelihood of misunderstandings or confusion, and increase confidence in the decision of the investor to take the next step.

This article will discuss a few of the basic things startups must have prepared prior to pitching investors.

Investor Updates

Investor updates are an excellent way of showing your investors that you’re executing on your plan and moving toward your goals, particularly in the beginning stages of fundraising. It also gives them an understanding of read review how far you’ve come since they last met you and will help build confidence.

Intellectual Property Assets

Venture Capitalists and Angels are usually interested in the intellectual property of a business and can play a major role in its valuation. Include patents, trademarks and other pertinent information even if it’s directly related to your product.

Cap Table

A clear cap table will show potential investors the amount of ownership you own and how it’s broken down. It’s recommended to include your articles of association, which could provide legal context around the structure of your business.

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