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What to include in your investor data room?

Posted on by Confiex Team

Last updated on June 26th, 2023 at 10:51 am

INTRODUCTION

Investors want to see specific things in your data room. Therefore, presenting your company’s right image to the investors is of utmost importance. When you present your company’s credentials, how you present the documents that highlight your company’s strengths and performance are the key to how investors perceive value in investing in your company. The picture has to not only accurate but also compelling for them to sense profitability by investing in your company.

Virtual Data Room

A good Virtual Data Room is the most ideal platform to securely share your mission critical business data between parties that are involved in the investment process. It is a powerful tool to better your odds in a quick and efficient fundraising process. Having an investor data room is a surefire way to speed up the process and impress an investor.

The following is the best possible manner in which you can leverage VDRs during the capital raising process, this includes the best practices for setting it up and also what should and should not be shared with prospective investors.

The Documents
The primary purpose of any presentation to prospective investors is to present a company’s prospect and potential for profitability against the investment made, it is imperative that the following documents should be presented to them systematically and accurately:

  • Legal structure, articles of incorporation, voting agreements, investor rights agreements, first sale and co-sale agreements, stock purchase agreements, of the company
  • Previous records of any capital raises and liquidity. Not only will this help them analyse the growth of the business, but also show that you take investor communication and transparency seriously
  • Minutes or previous actions/decisions of the Board of Director’s earlier meetings
  • Present and future business plans already envisaged by you
  • Company financials, including the profit and loss account statement with projections, pro-forma statements for the next year
  • Audits, tax returns, financial evaluations and other reports from third-party professionals
  • Details of Intellectual Property including granted and filed patents, trademarks and IP strategy
  • Information about products and services, including future roadmap
  • Marketing plans, strategies and assets, pitch deck, branding guidelines and vision
  • Information about sales strategy, including existing customers MMR and ARR with future sales strategy
  • Information about employees, including compensation and contracts
  • Details of investments in technology and R&D
  • Information about additional operational liabilities, including capital expenses, commercial leases
  • Market research studies including competitive analysis, features and pricing

All the above documents can be presented through an intuitive and easily navigable VDR, in a short period of time. They can present an impressive image of your company. However it is important to note that it is not necessary to include every business document in the presentation. Additional documents can be presented later, if asked for after the potential investor has shown initial interest in the deal and wants more information.

When setting up a data room, you can consider the following

Create Personalized Views
While your basic presentation should include all documents, you can create different views and access rights for different individuals evaluating your documents. This way you can tailor the viewing specifications according to each individual’s specific role. A finance head need not have access to legal documents, just as there is no need for a lawyer to have access to financial, sales or marketing details or statistics.

Read-only Access
Make sure you give potential investors a read only access. Then they will not be able to download, print or alter any document without your permission.

Easy Updating
Your data room should allow you ease of updating, altering, adding, deleting or editing documents whenever you wish without any hassles.

In-built Communication
Your data room should have an in-built communication facility of short messaging or commenting. This facilitates the review process as the investor does not have to leave the platform to express or communicate his views and opinions.

Tracking Audit
VDRs give you an insight into all the activities within your data room. It gives you detailed information about who viewed which document, for how long, how many times a particular document was visited, as also if certain documents have not been viewed at all. It also lets you know of any unusual activity like attempts to print or share documents by an unauthorized person.

VDRs are the best solution in any capital raising deal as its security and tracking ensures that the right access has been granted to your highly sensitive business documents and that its security has not been compromised or breached by any unauthorized third party.

 

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Confiex Team

The Confiex team specializes in providing premium virtual data room solutions tailored for businesses. With their vast experience in working with document sharing platforms, they have been actively supporting the Virtual Data Room community since 2015 by offering valuable information to users free of charge.

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About Confiex Data Room

Confiex Data Room is a trusted provider of premium virtual data rooms with over 5 years of on-ground experience and more than 11 years of industry experience. Headquartered in the financial capital of India, we have a strong partner network in the US and the UAE. Our global customer base spans across 100 countries, and we have successfully facilitated over 900 M&A deals, 100 IPO deals, and 90 NCLT deals. We are committed to providing users with valuable information on document security and Virtual Data Room (VDR) solutions. Discover more about Confiex Data Room.

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