Startups require lots of information to demonstrate they are able to grow their businesses. This means that they often utilize data rooms to manage their documentation and make it available to potential investors. A data room can help streamline due diligence, which is essential for any business looking to secure a large investment. But a well-prepared virtual data room requires more than a pitch deck and some financials to make.

What you put in your startup data room will be contingent on the type and amount of funding you're seeking. However, the data should be a part of your overall narrative about the company's growth. This narrative could be driven by market trends, regulatory changes, or other compelling "why now?" forces in the instance of a startup at beginning stages. But a business in the later stages could include more detailed data around the metrics or key accounts and connections, product expansions, and new business lines.

To help your investor understand the context for these data points, it's important to provide any first-hand market research and public reports you have. This is a good method of demonstrating your prudence to potential investors, and it will also help them decide whether or not to pursue the investment. Other important elements of information include an executive overview and a risk/reward table. You should also include an analysis of your product's value in relation to similar products in the market.

You'll need to include your legal documents in the investor data area, which includes your articles of incorporation, business certificates and tax information. Include your company's bylaws in order to help an investor comprehend the structure of your governance. Also, you should include a list of shareholders and an overview of the equity structure of your company.

You'll also need to include an documents for team members and employees. This includes the company's former and current employees including their salaries and titles. Startups should also provide onboarding documents that will give investors a better understanding of the company's culture and hiring process.

It's important for founders to be aware that based on the deal, they might need to add additional data to the investor data rooms. For example in the event that you're taking your case to court to resolve an intellectual property dispute, you could have to provide a more detailed data set to a judge or other parties involved in the case.

You don't want a potential investor having access to your confidential data without adequate security measures. PandaDoc's safe online data room allows you to share sensitive files with limited partners, auditors from a third party and portfolio companies, while maintaining full privacy. With automated email notifications and an audit trails that are unchangeable it is easy to ensure only the right people have access to your files.

Start with a PandaDoc virtual dataroom today for free and learn how easy it is to share sensitive files with others, even via the cloud.

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