How to Prepare a Data Room for Investor Due Diligence

Due diligence by investors is a crucial part of the investment process. Investor due diligence provides an opportunity for investors to dig into the company’s financials and documents, to evaluate the risks and decide if they wish to invest. A well-organized data room can accelerate the process, decrease the chance of miscommunication or confusion, and increase investor confidence.

This article will highlight a few of the essentials startups must have prepared before pitching to investors.

Investor Updates

Investor updates are an excellent tool to show investors you are still executing your plan and moving toward your goals. This is particularly relevant in the beginning stages. This will also give investors an idea of how far you’ve come since they last met you and can help to build trust.

Intellectual Property Assets

Angels and Venture Capitalists typically have an interest in a business’s intellectual property, which could be a major factor in its value. Showcase your IP by including trademarks, patent filings, and any other relevant data points even if they’re directly related to the product that you’re working on.

Cap Table

A clear cap-table outlines to potential investors what percentage of ownership you have, and how it is broken down. Include your articles of incorporation, which provide legal context for your company’s structure.

boosting investors confidence with ipo

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