A data room for investors is a central repository in which documents can be shared with potential investors or financial backers. It provides quick, streamlined and organized access to information without the need to send multiple versions of the same document by email. The data room is secured with features like expiring links, password protection, watermarks and granular access rights.

It is necessary to share many documents with potential financial backers. This includes the basic documents, such as your capitalization table, termssheet, and investment rounds, as well as more detailed due diligence information such as the most current financial statements (both historical and projected), and human resource documentation such as founders‘ resumes along with employment agreements and employee stock option plans. You should also include technology-related documents such as the system’s architecture, integrations and documentation for your current product.

The more details you include the more details you include, the longer it will take investors to check read it. More importantly the more data you include increases the risk of exposing or stealing sensitive information. It is essential to ensure that you are clear with limiting the amount of information you provide in order to make progress quickly.