How to build a data room

When preparing to raise and investment round from venture capital funds it is helpful to prepare materiales ahead of time. Many funds have similar due diligence processes and being organized is a clear signal that you are ready to take on capital. Investors rarely see how founders run the day-to-day operations so how they manage the fundraising process is usually investors only window into how founders execute.

A data room, or shared folders, is a common practice for running a financial transactions to share information. You can control who sees what and when they see it, while at the same time being transparent and efficient.

Common Practices

File sharing. Startups use Google Drive or Dropbox to store files and Docusend to monitor access to certain files.

Table of contents. Include a table of contents with summary of files and use Google Sites or Google Docs with links to folders and files. This will provide a simple clear outline for investors.

Example Table of Contents

  1. Company Summary
    • Teaser
    • Pitch deck
  2. Business Model
    • Product summary
    • Pricing plan
    • List of customers (by industry or size)
    • Commercial pitch
  3. Market Analysis
    • Market size calculation
    • Industry reports
    • Competitive analysis
  4. Financial Information
    • Historical KPIs (monthly)      
    • Users conversion rates
    • Cohort analysis       
    • Users & Conversion rates
    • Historical revenue (by product and country)
    • Financial projections (3 or 5 years)     
    • LTV / CAC analysis   
  5. Growth Strategy Expansion
    • SWOT Analysis
    • Company strategy
    • Product roadmap
    • Geographic expansion plan
  6. Human Resources
    • Background of founders and key leadership team
    • Advisory board
    • Organizational chart
    • Hiring plan (1 year)
  7. Corporate Governance
    • Summary of legal entities
    • Company legal documents
    • Capitalization table
    • Board presentations
    • Investor reporting
  8. Terms of Investment
    • Investment documents

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