What Documents Should You Share in Your Investor Data Room?
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 well-organized access to information without having to send multiple versions of the same document by email. The data room is also secure, with features like watermarks, expiring links, password protection, and granular permissions that make it easy to restrict access to sensitive information.
There are a variety of documents that must be made available to prospective financiers, ranging from the basics like your term sheet or capitalization table and investment rounds to more detailed due diligence information, including the most current financial statements (both historical and projected) and human resources documentation such as founders resumes, employment contracts and employee stock options. You should also include technology-related documents including integrations, system architecture, and existing product documentation.
The more information you include the more you include, the longer it will take for investors to read. More importantly, the more information you include, the greater the risk of misuse or compromise of sensitive information. To ensure that you can move quickly it is essential to find a balance between the need for clarity and the quantity of information that you provide.