Investors require lots of information to conduct their due diligence. This is why it’s important to prepare your data room when you begin your fundraising efforts. You can accelerate the investment process by including all necessary documents.
It is also recommended to include an index or table of contents for each section of the data room to assist in navigation. Private equity firms will appreciate a well-crafted documentation that is easy to navigate. It is also essential to highlight any changes that have occurred since the original upload of a document. This will show that you are always aware of the latest developments and demonstrates your willingness to be transparent throughout the entire process.
Investors frequently request historical and/or future financial statements. This will allow them confirm the accuracy of your numbers as well as ensure that they are aligned with your presentation deck. If you are providing projected financial projections, it is a best practice to visit the website include the assumptions, sources and reasoning behind the projections in the data room.
Certain founders have other documents like resumes of key members of the team along with employee stock agreements, as well as documentation on hiring. This can give investors a better understanding of the character of the company and the strength of its staff. Additionally certain entrepreneurs might include a market analysis or growth strategy to demonstrate how the company is poised to be successful in its sector.
