Important Elements of an Investor Data Room

An article we liked from Thought Leader Matt Preuss of Visible.vc:

What Should be in an Investor Data Room?

An investor data room is a powerful tool to better your odds of a quick and efficient fundraising process.

When setting out to raise capital for your business investors will often ask to see past financials and historical metrics.

Having an investor data room prepared is a surefire way to speed up the process and impress potential investors. Andrea Funsten is an investor at Basecamp Fund so it is safe to say she has seen her fair share of startups. An easy way to impress Andrea and get her to move forward with the deal quickie? A data room.

As Andrea Tweeted, “Even as early as the seed stage, an organized data room can make you stand out from the crowd. Sharing a list below of items that I received this week from a founder who is ~2 months away from raising. Left me so impressed and eager to move fast on the deal.”

Should I have an investor data room?

Before putting together your investor data room you need to ask yourself, “should I have a data room?” The idea of data rooms is widely debated between VCs and founders. As seen above, access to a data room allowed Andrea to move quickly on her deal. On the flip side, Mark Suster claims that “you should never have a data room.” Why?

Mark makes the case that a data room actually slows down the process. After meeting with an investor for the first time they may ask for a data room, hem and haw over the details, and delay giving a solid yes or no for as long as possible. This combined with the vested interest in collecting more data can certainly lead to slower decision making.

However, there are clear advantages of using an investor data room as well. If done correctly, a data room can...