Investor due diligence is an important step in the investment process. It’s the opportunity for investors to dig into a startup’s finances and documents to assess risk and decide whether or not to invest in the company. A well-organized and properly prepared data room can help expedite the process, decrease the possibility of misunderstandings or miscommunication, and boost confidence in the investor’s decision to take the next step.
While there are numerous items to include in a data room, this article will provide a few of the basic items that all startups should have prepared prior to pitching to investors.
Investor updates are a great way to show investors that you’re still working on your plan and working towards your goals, particularly in the early stages of fundraising. This will allow them to assess how far you have made progress since your last meeting and can build trust.
Angels and Venture Capitalists are often interested in the intellectual property of a company and can play a major part in the valuation of the company. Make sure you showcase your IP by including trademarks, patent filings and other pertinent data points even if they’re directly related to the product that you’re working on.
A clear cap-table outlines to potential investors what percentage of http://dataroomnote.com/boosting-investors-confidence-with-ipo/ ownership you have and how it is broken into pieces. Include your articles of incorporation, which provide legal background for your company’s structure.