Due diligence of investors is an important step in the investing process. Investor due diligence provides an opportunity for investors to delve through the startup’s financials and documents, analyze the risk and decide if they would like to invest. A well-organized data room can help speed up the process, lower the possibility of miscommunication, or miscommunication, and boost investor confidence.
While there are many items to include in a data room this article will provide a few of the basic items that all startups should be prepared for prior to pitching to investors.
Investor Updates
Investor updates can be an excellent way to demonstrate to investors you are still executing your plan and advancing towards your goals. This is especially relevant in the beginning stages. This will also give investors a sense of how you’ve progressed since last time they saw you and help build trust.
IP Assets
Angels and VCs typically have an interest in a company’s intellectual property, which could be a big part of its valuation. Display your IP by including trademarks, patents, and any other relevant data points even http://dataroomnote.com/on-premises-vs-off-premises-database-the-difference/ if they’re directly connected to the product you’re working on.
Cap Table
A clear table of your cap-table tells potential investors what percentage of ownership you have, and how it is broken into pieces. It’s also a good idea to include your articles of association, which provide legal background to your company’s structure.