What are data rooms and what should you store inside?

When pursuing the investment route, you must be prepared for a due diligence process.

Investors may have a comprehensive checklist of items they require, while angels might request some items piecemeal.

This process can become tedious and potentially drag out or even sabotage the investment opportunity.

However, they do this to clarify four key aspects:

Ask yourself, if you were an investor, would you invest without doing your own research?

In the crypto ecosystem, this is referred to as “Do Your Own Research” (DYOR).

Below, I’ve listed some of the most requested items for due diligence.

My advice is to create a folder in Google Drive or Dropbox to easily share it with interested parties:

CVs of team members
Market research
SWOT analysis
Patents (if applicable)
Information about the technology used, such as programming languages, versioning systems, libraries, frameworks, etc.
Financial statements
Accounting firm details
Valuation
Current cap table
Exit strategy
Certificate of incorporation
Organisational chart
Credit reports
Financial forecasts
Cash flow projections
Details of current funding and financials
Trademarks and copyrights
Contracts of employment
Insurance documents
Marketing plan
Branding materials

The list is extensive, and as you can see, I’ve omitted some information that more sophisticated investors may consider critical and might request.

You won’t have all these documents at the beginning of the fundraising process, but since you’ve created a drive folder, you can always add to it.

Also, I hope it goes without saying that you must name each document properly following a proper naming convention.

This will also signal professionalism to the investors.

Believe it or not, investors often look for subtleties that you may not consider.

Instead of wondering and complaining about it, be organised, meticulous, and thorough in your data room.

This will expedite the process.