A data room for investors is a central repository in which documents can be shared with potential investors or financial backers. It allows for rapid, efficient and well-organized access to information without having to send multiple versions of the same document by email. The data room is secure with features like expiring links and password protection, as well as watermarks and granular authorizations.
It is necessary to share numerous documents with potential financial investors. These include the essentials like your capitalization table, your termsheet, and investment rounds, along with more detailed due diligence information such as the most recent financial statements (both historical and projected) and documents related to human resources, such as founders’ resumes or employment agreements, as well as employee stock option plans. Include documents that are technology-related, such as systems architecture, integrations and existing product documentation.
The more information you include, the more time it will take for investors to read. Furthermore, the more information you provide increases the risk of exposing or stealing sensitive information. To ensure that you can move quickly, it is important to strike a balance between the need for clarity and the amount of information you provide.
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