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Using an Investor Data Room to Facilitate Investor Due Diligence
Due diligence by investors is an essential element of any investment process. The more prepared you are, the quicker your investors will be able to complete their reviews. An investor data room makes the task much easier for everyone involved.
LPs will want to see a variety of documents such as legal contracts, customer and supplier agreements as well as intellectual property information, market research, cap table financials, and much more. Utilizing a virtual data room makes it simple to share these documents with third parties, and reduces the possibility of duplicate emails or outdated copies being misdirected. These documents can be displayed in a structured easily accessible investor datarooms to show professionalism and organization.
The investor data room is also an ideal place to store and present your presentation deck (or investor pitch) for a prospective investor. The investor presentation isn’t only a part of due diligence supplementary however, many founders incorporate it to give context and allow investors to find the information they require.
Some founders utilize their investor data rooms to store various information for different types investors. For example there are some founders who have an “draft” investor data room that they share with investors who haven’t yet signed an agreement, and a different set of documents for those who are close to concluding a deal. This allows them to control the amount of information they share at any given time and ensures that the appropriate information reaches the right people.
