The investor data space acts as the central repository for all due diligence documents, ensuring that everything is in one place. It also helps streamline the process, and give both parties peace of peace check of. It’s a must for any startup seeking to raise funds from investors or buyers outside the company, however some founders aren’t sure if it’s worth the effort and cost.
The answer is often yes, but it’s dependent on the amount of information provided and how it’s presented. Investors want to be able to access all the information they need to make a choice, but providing too much or irrelevant data can take up their time and diminish the value of vital information.
As an entrepreneur, you’ll have to decide which information you include in your investor data room and only provide information that is essential to the due diligence process. Also, you should consider the type of investor you are targeting and tailor your content to suit.
For instance, you could include sections for industry reports and publications such as customer testimonials and references and a competitive analysis. It is important to include a section on the legal side with documents like articles of incorporation, corporate bylaws and other documents related to the company’s governance and structure.
Additionally, you should include a section with specific information on the intellectual property your company owns (patents, trademarks and copyrights). This is among the top criteria that angels and VCs look at when making their investment decisions. Inputting this information into your investor data area can make the deal more efficient and ensure investors are fully aware of the risks associated with the investment.
