Data Rooms

Creating a comprehensive data room should be an essential part of any investment round. Not only does it allow investors to access key information, but more importantly it protects founders by formalising the disclosure process.

Data Rooms are a secure place (typically in the cloud) where you keep (store) all the relevant materials an investor needs to access in order to complete due diligence on your company.

To access a Data Room you should get an investor to sign a Disclosure Agreement. This agreement acts as both an advance NDA and lists the key materials (documents) in the data room.

The act of an investor signing a Disclosure Agreement gives you protection around the sensitive information they will be accessing; while at the same time acknowledging that have had access to it. An investor therefore can’t claim at a later date they didn’t know about something that was in the Data Room, as a founder you are therefore protected.

It is therefore essential you disclose everything about your business no matter how small.

For example this is what we would expect in a Data Room: