A data room for investors is a central location where documents can be shared with potential investors or financial backers. It allows for rapid, efficient and organized access to documents without the need to send multiple versions of the same document via email. The data room is secure with features like expiring links and password protection, as well as watermarks and granular permissions.
There are many documents that should be shared with potential financial backers, from basics such as your term sheet as well as capitalization tables and rounds of investment to more detailed due diligence documents, such as the most recent financial statements (both historical and projected) and HR documentation like founders’ resumes, employment contracts and employee stock options. It is also recommended to include technology-related documents including systems architecture, integrations, and any existing product documentation.
The more information you add the more you include, the longer it will take for investors to read. The more information you provide more, the higher the chance that sensitive information could be https://dataroomtools.com/faq-about-the-due-diligence-process/ abused or compromised. It is essential to keep in mind the need for clarity with limiting how much information you provide to be able to move quickly.