A VC or investor has expressed interest in your startup and asked for more information. They want to verify what you’ve presented in your pitch and are seeking more information granular details about your business’s model and financials. A data room for investors could help.

Making the right choices can mean the difference between successful and unsuccessful investment deals. Investors are busy people and have no time for lengthy processes. It is essential to be prepared as soon as an investor is approached. The right information in an online data room will save both sides time and prove that you’re committed to fundraising.

To create a successful investor data room, begin by creating a folder structure that is clear and logically labeled. Only include the documents that investors will require to complete their due diligence. This will vary in each stage of the deal flow but generally includes the following:

IP Information (patent filings and trademarks)

People-Related Documentation (resumes and employee stock agreements and documents on hiring)

Financial Information (historical & projected), including sources and assumptions, as well as the rationale behind these projections

Consider adding documentation to prove that your company is in compliance with local, national and international regulations. This is a great way to set investor’s minds at rest early and make them feel secure that the business is operating legally. Not to mention, include sustainability-related documents over the long run (e.g. a carbon emission reporting system or other environmental sustainability measurements). A virtual data room with information on file access may assist startups in preparing for meetings with investors. This will result in stronger conversations and an improved understanding of the questions investors are most concerned about.