Investors require a large amount of data to conduct their due diligence. This is why it’s vital to prepare your data room before you begin your fundraising efforts. You can accelerate the investment deal process by preparing all necessary documents.
It is also recommended to include a document that has an index or table of contents for each data room in order to aid navigation. Private equity firms will appreciate a well-crafted documentation that is easy to navigate. It is also important to highlight steps of an investment deal process any information that has changed since the initial upload of a particular document. This shows that you are in control and shows your willingness to provide transparency throughout the entire process.
Including historical and/or projected financial statements is among the most requested items from investors. This will allow investors to check the accuracy of your numbers and ensure they are in conformity with your pitch deck. In addition, if you’re providing projections of financials, it’s recommended to include the assumptions, sources and logic behind the projections in the data room.
Some founders will also provide other documents like resumes of key members of the team, employee stock agreements and documentation regarding hiring. This can help investors get an overview of the team and the company. In addition, some entrepreneurs may include an analysis of market trends or a growth strategy to show that the company is in a position to be successful in its field.