Building Your First Data Room: What Investors Expect to See

You've got investor interest. They want to see your data room. If you're thinking "What's a data room?"—you're not alone. Here's everything you need to know.

What Is a Data Room?

A data room (or virtual data room) is a secure online repository where you store documents for investor due diligence. When an investor is seriously considering your startup, they'll request access to review your:

• Corporate documents
• Financial information
• Legal agreements
• Team information
• Product and technology details

Think of it as your startup's filing cabinet, organised for investor scrutiny.

When to Build Your Data Room

Ideal timing: 2-4 weeks before you start actively fundraising.

Don't wait until investors ask. Having a well-organised data room ready signals professionalism and preparedness. Scrambling to gather documents after an investor requests them creates delays and poor impressions.

Data Room Tools

Popular options:

Tool	Best For	Cost
Google Drive	Early stage, simple needs	Free
Notion	Integrated with other docs	Free-£8/user
DocSend	Tracking, analytics	£45/month
Dropbox	Simple sharing	£10-15/month
Dealroom	Serious M&A, later stage	£100+/month

For pre-seed and seed rounds, Google Drive or Notion is usually sufficient. Upgrade to DocSend if you want tracking (see who opened which documents).

Data Room Structure

Here's the folder structure investors expect:

📁 [Company Name] Data Room
├── 📁 1. Company Overview
├── 📁 2. Corporate Documents
├── 📁 3. Financials
├── 📁 4. Legal
├── 📁 5. Team
├── 📁 6. Product & Technology
├── 📁 7. Customers & Traction
├── 📁 8. Fundraising
└── 📁 9. Appendix

What Goes in Each Folder

1. Company Overview

Purpose: Quick orientation for investors

Include:

• Executive summary (1-2 pages)
• Pitch deck (latest version)
• One-pager / company fact sheet
• Product demo video (if available)

2. Corporate Documents

Purpose: Verify legal existence and structure

Include:

• Certificate of incorporation
• Articles of association
• Shareholder register (cap table)
• Board meeting minutes (key decisions)
• Shareholder agreements
• Stock option plan documents (EMI scheme)

3. Financials

Purpose: Understand financial health and projections

Include:

• Historical P&L (monthly, since inception)
• Balance sheet (current)
• Cash flow statement
• Bank statements (last 6-12 months)
• Financial model / projections (3-5 years)
• Monthly burn rate breakdown
• Unit economics analysis
• Revenue breakdown by customer/product

For pre-revenue startups: Focus on burn rate, runway, and projections. Be honest about assumptions.

4. Legal

Purpose: Identify risks and obligations

Include:

• Material contracts (customers, suppliers, partners)
• IP documentation (patents, trademarks)
• Employment contracts (key employees)
• Advisor agreements
• Any ongoing or threatened litigation
• Data protection policies (GDPR compliance)
• Insurance policies

5. Team

Purpose: Assess human capital and culture

Include:

• Org chart
• Founder bios and CVs
• Key employee bios
• Advisor list with roles
• Hiring plan
• Employee handbook (if exists)

6. Product & Technology

Purpose: Evaluate technical foundation

Include:

• Product roadmap
• Technical architecture overview
• Technology stack summary
• Security practices documentation
• Competitive analysis
• IP/patent filings

Note: Don't include source code unless specifically requested. A technical overview is sufficient initially.

7. Customers & Traction

Purpose: Validate market demand

Include:

• Customer list (if B2B) or user metrics (if B2C)
• Key customer contracts
• Customer testimonials / case studies
• Retention and churn metrics
• NPS scores (if available)
• Sales pipeline overview

8. Fundraising

Purpose: Clarify the current raise

Include:

• Current round terms (if term sheet exists)
• Previous funding history
• Use of funds breakdown
• Investor update examples (shows communication style)
• SEIS/EIS advance assurance (if applicable)

9. Appendix

Purpose: Additional supporting materials

Include:

• Press coverage
• Industry research / market analysis
• Detailed technical documentation
• Any other supporting materials

Data Room Best Practices

1. Name Files Clearly

Bad: Document1.pdf, Final_FINAL_v3.xlsx

Good: 2025-01-CapTable.xlsx, 2024-CustomerContract-Acme.pdf

Use consistent naming: [Date]-[Type]-[Description].[ext]

2. Keep Documents Current

Update your data room regularly. Stale information erodes trust. Add a "Last Updated" date to key documents.

3. Use PDF for Final Documents

Convert Word docs and spreadsheets to PDF for:

• Corporate documents
• Contracts
• Policies

Keep Excel/Sheets format for:

• Financial models (investors want to play with assumptions)
• Cap tables

4. Create a README

Add a document at the top level explaining:

• What's in each folder
• Key contacts for questions
• Last update date

5. Control Access

• Use view-only sharing initially
• Grant download access selectively
• Track who accesses what (DocSend)
• Revoke access when round closes or discussions end

6. Prepare for Questions

Anticipate follow-up questions and either:

• Include answers in the data room
• Have responses ready to send quickly

Common follow-ups:

• "Can we see the last 12 months of bank statements?"
• "What are the assumptions behind your revenue projections?"
• "Can we speak with a customer reference?"

What NOT to Include

• Confidential customer data without consent
• Source code (unless specifically requested)
• Personal information beyond what's necessary
• Incomplete documents (better to omit than include drafts)
• Aspirational documents presented as current (be honest about status)

Common Mistakes

1. Disorganised Structure

Dumping everything in one folder makes investors work harder. They'll question your operational capabilities.

2. Missing Key Documents

The absence of basics (cap table, financials, incorporation docs) suggests you're not prepared.

3. Outdated Information

Financials from 6 months ago or a pitch deck with old metrics looks sloppy.

4. Over-Sharing Too Early

Don't share sensitive customer contracts or detailed IP before you have a term sheet. Start with the basics.

5. Inconsistent Numbers

If your pitch deck says £50k MRR but your P&L says £35k, investors will notice. Ensure consistency.

Data Room Timeline

Fundraising Stage	Data Room Action
2-4 weeks before outreach	Build and organise data room
Initial meetings	Share pitch deck only
After positive meetings	Share data room access
Due diligence phase	Respond to requests, add documents
Post-close	Revoke external access

The Bottom Line

A well-organised data room:

• Signals professionalism
• Builds investor confidence
• Accelerates due diligence
• Reduces back-and-forth

Invest the time upfront. The payoff is faster closes and better investor relationships.

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