Data rooms: what to put in, and when to open it.
A data room is one shared folder with every document an investor needs to check your story. Built early, it saves you weeks at the end of a round.
The short answer
Build the data room before you start pitching, but share it only when an investor is serious, usually after a first meeting goes well or a term sheet is close. Keep it tidy, current and limited to what a careful investor would actually ask for.
How it works
Company basics
Certificate of incorporation, bylaws, board consents and a current cap table.
Money
Financial statements, a simple model, bank balance and burn, and your round plan.
Product and customers
Key metrics, customer contracts, pipeline and a short product overview.
People and IP
Founder and employee IP assignments, option grants and key hires.
Legal and risk
Prior financings, material contracts, licenses and any disputes or open issues.
When to open it
Most investors do not want a data room at the first meeting. They want your deck and a conversation. Open it when an investor asks for diligence, or when you are near a term sheet. Share a smaller set early if a partner needs one or two numbers to take you to their partnership.
How to organize it
Use numbered folders that match the order above. Name files plainly, with a date. Put a one-page index at the top so an investor can see what exists without opening everything. Track who has access, and remove access when a conversation ends.
Before you share
- Does the cap table match every signed SAFE, note and option grant?
- Has every founder and employee signed an IP assignment?
- Do the metrics in the room match the metrics in the deck?
- Have you removed anything you are not allowed to share, such as customer data?
Terms to know
Data room
A shared, access-controlled folder of documents for investor diligence.
Diligence
The checks an investor runs before committing money.
IP assignment
A signed agreement that moves work product from a person to the company.
Does your deck match what the data room shows?
Investors compare your slides with the documents behind them. Upload your deck and we flag claims that need proof before diligence starts.
Questions founders ask
Do I need paid data room software?
Not at seed. A well-organized shared drive with view-only access works. Dedicated tools add access logs and watermarks, which matter more in later rounds.
Should every investor get the same access?
Usually yes for the core folders. Keep sensitive items, such as customer contracts, for the investors who are close to committing.
Sources
Sources: common US startup diligence practice. Not legal advice.
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