Data Room, Due Diligence

Your Data Room: What it is, and How to Build One

A data room, sometimes referred to as a “due diligence box,” is a cloud solution made for the sharing and securing of sensitive business information.

A data room should not be confused with a simple cloud storing service. When handling confidential information, you’ll need features such as rights management and Q&A.

The goal here is to maximize your fundraising potential by being organized and demonstrating that you respect the investor’s time by being prepared. Having a well-organized folder is also an opportunity to show investors that you have a real business and are ready to raise capital.

This data room contains vital documents about your business and is incredibly useful to your potential investors, so it’s essential to keep it both functional and secure. The materials in your data room should include: 

  • Entity filings
  • Patent filings
  • Articles of incorporation
  • Income statements
  • Balance sheet
  • Other documents detailing your business 

Investors who want to invest will look for these documents so they can run their due diligence on you and your business. The more simplified you can make this process for them, the better.

Spend some time putting your data room together and make sure you have all the necessary documents for your investors. Most importantly, be prepared and have these documents ready before you begin your raise.

Continue reading in our most recent eGuide: How to Prepare for Your Fundraise


 

Hall T. Martin is the founder and CEO of the TEN Capital Network.TEN Capital has been connecting startups with investors for over ten years.

You can connect with Hall about fundraising, business growth, and emerging technologies via LinkedIn or email: [email protected]

 

, ,
Previous Post
Get to Know Your Investors
Next Post
Space Tech: The New Investment Frontier

Related Posts

due diligence process

What is the Real Due Diligence Process?

2 min read, I’m always surprised by how many investors say the team is the most important element of a startup, but how little the due diligence process focuses on the team. I can look back on successes and failures…
The Due Diligence Process

The Due Diligence Process

2 min read When embarking on a new investment, it’s essential to have a Due Diligence process in place to check the basics. This process will vary from deal to deal based on the risks associated with each one. Start…
technical due diligence

Technical Due Diligence

1 min read Technical Due Diligence (TDD) is a detailed evaluation of a company’s technical side, including both existing software and hardware products and those in development. Potential investors need to gather detailed information about a prospective company to highlight…
Menu