Due diligence for investors is an an important part of any investment. The more prepared you are, the faster your investors can finish their review. A data room for investors can make the process simpler for all parties.
LPs are likely to require a variety of documents including legal contracts, customer and supplier agreements as well as intellectual property information, market research, cap table, financials, and many more. A virtual data room makes it easy to share these documents with third parties, and reduces the possibility of receiving duplicate emails or old copies being misdirected. The inclusion of these documents in a well-organized and easily accessed investor data rooms also helps to demonstrate your organization and professionalism.
The investor data room could be used to also store and share an investor pitch with a prospective investor. The investor presentation is not exclusively part of due diligence supplementary however, many founders incorporate it to give information and allow investors to get the information they require.
Some founders also choose to make use of their investor data room as a storage space for various sets of data for different types of investors. For example some founders have a “draft” investor data room where they only share with investors who haven’t yet signed a commitment and another set of documents for investors who are in the process of signing a contract. This allows them to control the amount of information they provide at any given time and ensures that the right information is shared with the appropriate people.
https://dataroomsource.com/virtual-data-rooms-and-how-progressive-they-are/
