Using the Dataroom for Fundraising
The dataroom is an essential tool in all phases of the fundraising cycle. When you’re sharing your data with potential investors to prepare for an introductory pitch deck or working with buyers and investors to complete diligence on your business, a well-organized virtual dataroom can be key to building trust and speeding the funding process.
During the initial pitch, startups can utilize its data room to communicate historical and projected financials including capitalization charts, product pricing and projections. It is important to be able to create a granular access control to ensure that only relevant information is put in the right hands. Using features such as watermarking expiring links, expiring links, and password protection allows startups to decide who is able to see what and when, and also rescind access as needed.
In the next stage of a fundraise, a startup can include information about the company’s staff including resumes, employee stock agreements as well as market information such as the size of the market, its growth trajectory and competitive landscape. In-depth bios of team members help build trust by demonstrating that the founders have the knowledge, skills, networks and expertise needed to scale the business.
At the end of a fundraise, a startup can include the term sheet or other documents to ensure that investors can sign off on the investment. Due diligence will then begin. Additionally some startups will provide regular investor updates throughout the year to keep potential investors informed of progress and to demonstrate continued momentum.