An investor data room is a digital repository for sharing files with potential investors or third parties during fundraising and M&A transactions. It helps startups organize their documents in a central place, rather than distributing documents via multiple emails that contain attachments. It also gives startups an opportunity to monitor access to third parties and safeguard sensitive information from accidental leaks by allowing only authorized users to download or view a document.

Documents that are essential to keep in the investor’s dataroom include documents relating to the formation of a company and legal paperwork, intellectual properties (like trademarks and copyrights), non-compete agreements, stock option plans agreements with customers and business partners and employee agreements. Startups may also include their pitch deck in their investor data room to display the potential of the company market research, competitor analysis, as well as a business model.

Investors who are sophisticated will need to see the complete list of documents for the company and a sample of financials which provide the business’s model. You can accelerate the process by providing these documents in a consolidated form like an investor data room.

In addition investor data room the investor data room can be used to provide regular updates for investors throughout the year. This helps keep investors engaged with the business and shows that the team is focused on growing and is executing on their plans. A well-designed data space for investors will include short message and commenting options to ensure that potential investors can post questions without leaving the platform.