In recent years, venture capital funding has been growing at a rapid pace. This leaves investors with little time to study the details of each deal. So, it’s up to founders to ensure that their due diligence process is as efficient as is possible by using a well-organized virtual data room.
When you’re trying to raise Series A funds or planning to present your idea to an investor who is new to you, it’s essential that you have your stage 1 data room ready to go before you have a single fundraising discussion. This data must be organized and easily accessible to ensure that investors have access to all the documents.
A stage 1 dataroom typically includes the pitch, financial statements (including quarterly income statements as well as year-to date income statements) and any other information you wish to provide. It also should include a section of your market research done by hand and analysis of competition to help investors comprehend your unique position in the market.
Include any prior investor updates you’ve received. This includes milestones achieved as well as any concerns that were previously raised by investors. This is an excellent way to show your willingness to be transparent with potential investors and can make the difference in their decision to invest.
When choosing a data room, make sure you choose one that is easy to use and allows you to share files with other users via a secure connection. Be sure that the provider comes with a variety of features, including bulk-upload/import, customizable watermarking and a built in NDA that can streamline the process by eliminating the need for additional documentation.
