The due diligence of investors is an important part of any investment. The more prepared you will be, the faster your investors will complete their due diligence. A data room for investors can make the process simpler for all parties.
LPs may require many different documents, such as legal contracts, agreements with suppliers and customers, intellectual property, market research, cap tables financials, and other. With the virtual dataroom, it’s easy to share files with third parties. This makes it impossible to send duplicate copies or old versions. These documents can be displayed in a structured easily accessible investor datarooms to demonstrate professionalism and organization.
The investor data room can also be used to store and share a presentation deck or investor pitch to a potential investor. The investor presentation isn’t solely a part of the due diligence supplementary, but many founders include it to provide the context and make it easier for investors to access the information they require.
Some founders also make use of their investor information room to store different sets of information for different types of investors. Certain founders, for instance have a “draft” or investor data room they only communicate with investors who have not yet committed and another set of documents to those who are preparing to sign an agreement. This enables them to control the amount of information they disclose at any given point and ensures that the right information is shared with the right people.