A data room is an instrument which assists in due diligence during the course of a major financial transaction such as a sale of a company or a venture capital round, or an initial publicly traded (IPO). By keeping all important documents in an online environment, companies can ensure that only the information required by third parties is accessible and that sensitive information is secured from unauthorized disclosure.

When creating an investor data room, the founders can choose to organize their files in a top-down or bottom-up approach. The former involves creating main folders which correspond with specific types of data including project stages, department or even the stage of the project and subfolders that further split files into simple-to-read structures. The second is a more efficient solution that lets users access data by simply clicking on the document’s name or image.

Documents that are commonly found in the investor dataroom include a presentation deck, a brief overview on the company, and an extensive overview of the market, including competitor analysis and references from customers. It is also advisable for founders to include an overview of the team’s current roles and the compensation they will receive.

Include a section that focuses on the financial historical and/or forecast performance of your company. The financials should be clear and concise, backed up by relevant sources and logical assumptions. Founders may also include a competitor matrix or product development roadmap, as well as other legal documents relevant to the fundraising process. In addition, a section on the company’s brand and its marketing goals is often beneficial.

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