Investor due diligence is an essential part of the investing process. Investors have the chance to dig into a startup’s finances and documents in order to evaluate risk before deciding whether or not to invest in the company. A well-organized and organized data room can speed up the process, reduce the chance of miscommunication or miscommunication, and increase confidence in the investor’s decision to move forward.
While there are many items to include in a data room this article will highlight some of the essentials that all startups should have prepared prior to pitching to investors.
Investor Updates
Investor updates are an excellent way to demonstrate to investors you are still executing your plan and working towards your goals. This is especially crucial in the initial stages. It will also allow them to see how far you’ve made progress since your last meeting and will help increase confidence.
Intellectual Property Assets
Angels and Venture Capitalists typically have an interest in businesses’ intellectual property, which can be a significant component of its valuation. Include patents, trademarks, and other relevant data, even if it’s not directly related to your product.
Cap Table
A clear cap-table shows potential investors how much ownership you own, and how it is broken down. Include your articles of incorporation, which provide legal background for the structure of your business.